Which of the Following Will Reduce Inflation by Decreasing the Growth

question 115

Multiple Choice

Which of the following will reduce inflation by decreasing the growth rate of the money supply?

• A) A decrease in government spending.
• B) An increase in the discount rate.
• C) The purchase of securities in the open market by the Fed.
• D) An increase in automatic stabilizers.

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Definitions:

Invisible Differences

Discrepancies or variances that are not directly observable or tangible but affect the valuation or perception of assets and liabilities.

International Financial Reporting Standards

Global accounting principles that guide the preparation of financial statements by companies, aiming to increase comparability and transparency across international boundaries.

Comparability

The ability to easily analyze and recognize similarities and differences between financial statements over time or between companies.

High Inflation

A situation where price levels in an economy rise rapidly over a period, decreasing purchasing power.