The conventional monetary policy to fight inflation would be to

Question

Quizplus · Accepted Answer

The conventional monetary policy to fight inflation is to decrease the rate of monetary growth. When the money supply is reduced, there are fewer dollars chasing the same amount of goods and services, which can lead to decreased demand and lower prices, thus fighting inflation. Choices C and D (running budget deficits or surpluses) are not directly related to monetary policy and may have different impacts on inflation depending on the specific circumstances. Choice A (increasing the rate of monetary growth) would actually exacerbate inflation rather than fighting it.

The Conventional Monetary Policy to Fight Inflation Would Be to