Recall a time when the economy was very strong for several years, and business was booming. During that time, however, prices began to increase, and there was fear that the increase may have continued for an extended period of time. Which of the following actions could the Fed have taken to counteract the increasing prices?

Question

Quizplus · Accepted Answer

Raising the discount rate is a monetary policy tool used by the Federal Reserve to combat inflation by making borrowing more expensive, thereby slowing down the economy and reducing price increases.

Recall a Time When the Economy Was Very Strong for Several