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To reduce inflation, the Federal Reserve _____ the money supply. This action also causes the economy to shrink. increases decreases does not change

To reduce inflation, the Federal Reserve _____ the money supply. This action also causes the economy to shrink. increases decreases does not change
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To reduce inflation, the Federal Reserve _____ the money supply. This action also causes the economy to shrink.

increases
decreases
does not change

asked
User Marjan Venema
by
8.3k points

2 Answers

3 votes

Answer:

decreases

Step-by-step explanation:

answered
User Natsumi
by
8.2k points
6 votes
To reduce inflation, the Federal Reserve decreases the money supply. This action also causes the economy to shrink. The only way to increase the value in something is to increase the demand, and limit the availability.
answered
User Mahdi Ghelichi
by
8.3k points
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