The Fed fights inflation by _______. A. Lowering the federal funds rate, which lowers interest rates and

Question:

The Fed fights inflation by _______. 

A. Lowering the federal funds rate, which lowers interest rates and decreases aggregate demand 

B. Raising the federal funds rate, which raises interest rates and decreases aggregate demand 

C. Decreasing the monetary base, which raises the interest rate and increases saving 

D. Lowering the long-term real interest rate, which increases investment and spurs economic growth

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Foundations of Macroeconomics

ISBN: 978-0134492001

8th edition

Authors: Robin Bade, Michael Parkin

Question Posted: