When the economy is expanding too quickly and the Federal Reserve (Fed) wants to control future growth in the economy, the Fed will:

Question

Quizplus · Accepted Answer

When the economy is expanding too quickly, the Fed will decrease the money supply to control future growth in the economy. By decreasing the money supply, interest rates will rise, which makes borrowing money more expensive, therefore reducing spending and slowing the economy down.

When the Economy Is Expanding Too Quickly and the Federal