If the Fed fears inflation, it ________ by ________ government securities.

Name: If the Fed fears inflation, it ________ by ________ government securities.
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Question

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If the Fed fears inflation, it needs to decrease aggregate demand. One of the tools the Fed can use to achieve this is by selling government securities, which decreases the money supply and increases interest rates, both of which can lead to a decrease in consumer spending and investments, thus lowering aggregate demand.

If the Fed Fears Inflation, It ________ by ________ Government

If the Fed Fears Inflation, It by Government