If Inflation Starts to Increase, the Federal Reserve Is Likely

question 4

Multiple Choice

If inflation starts to increase, the Federal Reserve is likely to:

• A) decrease interest rates.
• B) increase interest rates.
• C) purchase stocks and bonds to stimulate the stock market.
• D) print more U.S. dollars to increase the circulation of money.
• E) coordinate a fiscal policy with the president to show that the federal government is unified, which encourages long-term planning and investment by businesses.