Suppose the Federal Reserve announces that it will be making a change to a key interest rate to decrease the money supply.This is likely because the Federal Reserve is
A)worried about inflation.
B)worried about unemployment.
C)hoping to increase the demand for goods and services.
D)worried that the economy is growing too slowly.

Question

Quizplus · Accepted Answer

Decreasing the money supply is a contractionary monetary policy, which is used to combat inflation by increasing interest rates and tightening credit. This makes borrowing money more expensive and leads to a decrease in spending and lending, ultimately decreasing the money supply in the economy.

Suppose the Federal Reserve Announces That It Will Be Making