If the Federal Reserve attempts to continue reducing unemployment by manipulating monetary policy,which of the following would you expect to see?

Question

Quizplus · Accepted Answer

When the Federal Reserve tries to reduce unemployment by manipulating monetary policy (such as decreasing interest rates or increasing the money supply), it usually leads to an increase in inflationary pressures. This is because the increased demand for goods and services from lower interest rates can outpace the economy's ability to supply them, leading to higher prices. Therefore, choice B is the best answer.

If the Federal Reserve Attempts to Continue Reducing Unemployment by Manipulating