Question

What did the Federal Reserve do to try to reduce

Answer 1

Answer:

b

Explanation:

Answer 2

Answer:

In the reduction of inflation by the Federal Reserve, it must allow interest rate to rise.

Explanation:

Inflation can be described as a continuous upward movement in the prices of goods and general services in an economy for a certain period of time until measures are taking to curb the rapid movement. This period results in the reduction of currency purchasing power in such a country.

However, the increase in the INTEREST RATE can be used to cushion or slow down the inflation by discouraging people to borrow due to the high rate of interest introduced by the apex bank.

Also, this will result in low spending by the people and also a reduction in the price of goods and services.

NOTE!!! The option C which is the price control mechanism, can also be used but this might result in job losses and recession.