If the Federal Reserve wants to prevent inflation, it should ________.
A. decrease the money supply to raise interest rates and lower aggregate demand
B. decrease the money supply to lower interest rates and increase aggregate demand
C. increase the money supply to raise interest rates and lower aggregate demand
D. increase the money supply to lower interest rates and raise aggregate demand
Answer: A
You might also like to view...
When the income elasticity of demand for a good is negative, one can correctly conclude that:
a. the good is a normal good. b. the good is an inferior good. c. the good is a substitute. d. the good is a complement. e. total revenue will decrease when the price increases.
A diversified portfolio only makes sense for large institutional investors, not for small investors
a. True b. False Indicate whether the statement is true or false
When the Federal Reserve System buys bonds in the open market, the national debt
A. Must increase as long as the Fed buys only newly issued bonds. B. Must increase. C. Will decrease because the Fed is a government agency. D. Is not affected.
The transactions approach to measuring money relies on the role of money primarily as a
A. temporary store of value. B. standard of deferred payment. C. unit of account. D. medium of exchange.