Question

Suppose the federal reserve increases money supply sharply and the inflation rises from its current 2% to 5% a year. who will be benefiting and who will be the main loser of this higher inflation?

Answer 1

The reaping benefits and who may be the main loser of this higher inflation: America's economic system is expected to be sluggish, as the Federal Reserve maintains to tighten monetary policy to carry inflation down.

Monetary policy is the coverage followed by the financial authority of a nation to manipulate both the interest rate payable for very brief-term borrowing or the money supply, frequently as a try to reduce.

Monetary policy is a set of equipment used by a nation's important bank to control the general cash supply and sell economic boom and appoint strategies along with revising interest charges and converting bank reserve necessities.

Monetary policy refers to the steps taken with the aid of a rustic's relevant bank to manipulate the cash delivered for financial balance. for example, policymakers manipulate money flow for growing employment, GDP, and price stability via the usage of equipment along with hobby quotes, reserves, bonds, and so forth.

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