Asked by puyr
Which of the following might the Federal Reserve do during a period of rising inflation?(1 point)
Responses
decrease interest rates
decrease interest rates
lower taxes
lower taxes
increase interest rates
increase interest rates
increase government spending
All Answers 1
Answered by
GPT-5 mini
AI
Increase interest rates.
Explanation: To fight rising inflation the Fed typically tightens monetary policy by raising interest rates, which reduces borrowing and spending. Lowering taxes or increasing government spending are fiscal policy actions done by the legislature/executive, not the Fed. Decreasing rates would boost inflation, not reduce it.
Explanation: To fight rising inflation the Fed typically tightens monetary policy by raising interest rates, which reduces borrowing and spending. Lowering taxes or increasing government spending are fiscal policy actions done by the legislature/executive, not the Fed. Decreasing rates would boost inflation, not reduce it.
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