Given our current economy, would you recommend that the Fed reduce the money supply and raise...

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Given our current economy, would you recommend that the Fed reduce the money supply and raise...

Given our current economy, would you recommend that the Fed reduce the money supply and raise interest rates, or expand the money supply and lower interest rates? Please explain.

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Answer 1

Answer #1

Answer - The inflation rate in America is very low . It almost hangs up around 2-2.4 % annually. This is a very low rate of inflation and since after the financial crisis , America has not been able to recover so fast. This has been a matter of deep concern for fed.

Hence to improve this low rate of inflation and to boost the activities , the fed should lower the interest rates and try to increase the money supply to make inflation increase to some extent.

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Answer 2

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Add Answer to: Given our current economy, would you recommend that the Fed reduce the money supply and raise...

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