Question

When the economy is growing too quickly and prices are rising very fast, the _______

economic growth by putting less money into the economy.
tries to slow down

Government
Federal Reserve

Answer 1

The Federal Reserve tries to slow down economic growth by putting less money into the economy. When the economy grows too quickly and prices rise rapidly, it leads to inflation. Inflation is a general increase in the prices of goods and services in an economy over time. It erodes the value of money, reduces purchasing power, and decreases the standard of living. Therefore, it is essential to control inflation to maintain the stability of the economy.