If the source of economic instability is generally variations in spending, then the Fed should

Question

Quizplus · Accepted Answer

The Fed can influence spending by controlling the money supply. By setting money supply targets, the Fed can aim to stabilize the economy and prevent sudden variations in spending. Printing more money or buying gold are not effective solutions and could actually cause further instability. Raising taxes could potentially reduce spending, but it could also hurt economic growth and should not be the first solution considered.

If the Source of Economic Instability Is Generally Variations in Spending