Question

Which of the following open market operations would the Federal Reserve MOST likely perform during a period of high employment, high inflation, and unsustainable growth in the economy?

Answer 1

raise inflation or lower it depended on situation

Step-by-step explanation:

When inflation is too high, the Federal Reserve typically raises interest rates to slow the economy and bring inflation down. When inflation is too low, the Federal Reserve typically lowers interest rates to stimulate the economy and move inflation higher.

Answer 2

Answer: Contractionary open market operation

Step-by-step explanation:

During a period of high employment, high inflation, and unsustainable growth in the economy, the Federal Reserve is most likely to perform a contractionary open market operation, such as selling government securities, to reduce the money supply and slow down the economy. This can help to curb inflation and stabilize growth. By reducing the money supply, it becomes more difficult for banks to make loans, which can slow down spending and bring inflation under control.