When Inflation Is Rising, the Fed Will

question 119

Multiple Choice

When inflation is rising, the Fed will

• A)lower nominal interest rates to increase potential GDP and bring it in line with aggregate demand.
• B)raise nominal interest rates to reduce aggregate demand.
• C)raise nominal interest rates to stimulate spending.
• D)lower nominal interest rates to stimulate production and bring it in line with aggregate demand.
• E)raise nominal interest rates to stimulate production.

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