Which action is the Fed most likely to take to curb inflation?
A) lower the discount rate
B) lower reserve requirements
C) raise taxes
D) sell securities in the open market

Question

Quizplus · Accepted Answer

The Fed is most likely to sell securities in the open market to curb inflation. When the Fed sells securities in the open market, it reduces the amount of money in circulation, which can help decrease inflation. Lowering the discount rate or reserve requirements would have the opposite effect of increasing the money supply, which could worsen inflation. Raising taxes can also help reduce inflation, but that is not within the direct control of the Fed.

Which Action Is the Fed Most Likely to Take to Curb