The correct answer is B.
If aiming to reduce inflation, the Federal reserve needs to decrease the money supply, which means reducing the amount of money in circulation in the economy. This is denominated a contractionary monetary policy.
If the money supplied decreases, the cost of borrowing (the cost of money) increases due to its increased relative scarcity. This, in turn, discourages borrowing, and produces a lower income, and a drop in demand, production, and employment. Therefore, it causes the economy to shrink as mentioned in the question.
As spending drops, so do prices and therefore inflation.
Such a strategy is only implemented when there are inflationary preassures, as it also brings important side effects in terms of output.
To control or reduce inflation, the Federal Reserve decreases the money supply. This increase in the purchasing power of the dollar reduces inflation but may also cause the economy to shrink due to less money available for spending and investment.
To reduce inflation, the Federal Reserve decreases the money supply. By limiting the amount of money in circulation, the purchasing power of the dollar increases, leading to a reduction in inflation. However, this can also cause the economy to shrink as it restricts economic growth, because less money is available for consumer spending and investment.
Looking at it from another angle: If the Federal Reserve increases the money supply, it has the potential to spark inflation, because there is more money chasing the same quantity of goods and services. Therefore, to control or reduce inflation, the Federal Reserve actually decreases the money supply.
#SPJ6
Answer:
drunkk
Explanation:
he is drunk
Answer:
Industrialization and mechanization
Explanation:
Sect - a term used to describe a relatively small religious organization that has split off from a denomination due to small religious differences, i.e. Jehovah's witness.
Denomination (which a sect splits off from) is a well-established religious orgaization in which a large part of the population are members, i.e. Judaism, Catholicism.
Answer:
Sect
Explanation:
Answer:
absolute
Explanation:
Answer:
I think true not sure
Explanation:
I think education helps people out of poverty. A global education system gives people an awareness of their own worth, restores self-confidence and self-love. The education of the chance of the poorest people to fight for their rights before those most favored by society.
Irina Bokova, Director-General of UNESCO (United Nations Educational, Scientific and Cultural Organization), said that education is the best way to combat poverty. This is because the best way to combat poverty is to give the most profitable citizens the chance to fight inequality and change their lives. Ending poverty is taking care of the most vulnerable so that they rediscover their intrinsic value and believe in themselves, only education can do that.