The Fed is concerned that the economy is growing too rapidly.Given these concerns,it is likely to pursue policies to restrict the supply of money and raise interest rates.
Level of Learning 3: Application of principles

Question

Quizplus · Accepted Answer

The statement is true as the Fed typically pursues policies such as increasing reserve requirements, selling government securities, and raising interest rates when it is concerned about the economy growing too rapidly and inflationary pressures mounting. These policies are aimed at reducing the supply of money and credit in the economy, which can help contain inflation and moderate economic growth.

The Fed Is Concerned That the Economy Is Growing Too