High Inflation Can Spiral Out of Control When

question 113

Multiple Choice

High inflation can spiral out of control when

• A)expected inflation increases nominal interest rates,causing the Fed to buy bonds,increasing the money supply and further increasing inflation.
• B)expected inflation decreases nominal interest rates,causing the Fed to buy bonds,increasing the money supply and further increasing inflation.
• C)expected inflation increases nominal interest rates,causing the Fed to sell bonds,increasing the money supply and further increasing inflation.
• D)expected inflation decreases nominal interest rates,causing the Fed to sell bonds,increasing the money supply and further increasing inflation.

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