What monetary policies should the Federal Reserve enact to combat higher inflation rates for consumer goods and services?(1 point)

Question

Responses

Enact contractionary monetary policies to increase money supply.
Enact contractionary monetary policies to increase money supply.

Enact expansionary monetary policies to decrease the money supply.
Enact expansionary monetary policies to decrease the money supply.

Enact expansionary monetary policies to increase the money supply.
Enact expansionary monetary policies to increase the money supply.

Enact contractionary monetary policies to decrease the money supply.

Answer 1

To combat higher inflation rates for consumer goods and services, the Federal Reserve should enact contractionary monetary policies to decrease the money supply. This typically involves raising interest rates and reducing asset purchases, which can help to cool down the economy and reduce inflationary pressures.