Which course of action should the Federal Reserve take if it wishes to reduce inflation and curb consumer spending?
A) The Federal Reserve should buy securities.
B) The Federal Reserve should sell securities.
C) The Federal Reserve should decrease the reserve requirement.
D) The Federal Reserve should lower the discount rate.
E) The Federal Reserve should sell securities and lower the discount rate.

Question

Quizplus · Accepted Answer

B) Selling securities reduces the money supply, thus curbing consumer spending and bringing prices down.

Which Course of Action Should the Federal Reserve Take If