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To reduce inflation, the Federal Reserve _____ the money supply. This action also causes the economy to shrink.

increases
decreases
does not change

2 Answers

3 votes

Answer:

decreases

Step-by-step explanation:

User Natsumi
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To reduce inflation, the Federal Reserve decreases the money supply. This action also causes the economy to shrink. The only way to increase the value in something is to increase the demand, and limit the availability.
User Mahdi Ghelichi
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