The correct answer is B.
If aiming to reduce inflation, the Federal reserve needs to decrease the money supply, which means reducing the amount of money in circulation in the economy. This is denominated a contractionary monetary policy.
If the money supplied decreases, the cost of borrowing (the cost of money) increases due to its increased relative scarcity. This, in turn, discourages borrowing, and produces a lower income, and a drop in demand, production, and employment. Therefore, it causes the economy to shrink as mentioned in the question.
<u>As spending drops, so do prices and therefore inflation. </u>
Such a strategy is only implemented when there are inflationary preassures, as it also brings important side effects in terms of output.
Don Quixote thinks the windmills are monsters
Answer: Asia
Explanation:
Where did US military officials expect the Japanese to attack <u>Asia</u>
Sadly, the aaa would probably try to go against it because they would get more money repairing the careless accidents teens got into from driving at a young age. short on time so I can’t rly write a paragraph atm, but they would probably try to convince ppl and perhaps go to the government in an attempt to stop the policy
