Question

What did the Federal Reserve do to try to reduce

inflation?
OIt allowed interest rates to fall.
It allowed interest rates to rise.
It instituted price controls.

Answer 1

The Federal Reserve reduces inflation by adjusting interest rates, allowing them to fall or rise, but it does not institute price controls.

Step-by-step explanation:

To reduce inflation, the Federal Reserve has used various measures, including adjusting interest rates. One strategy that the Federal Reserve has employed is to allow interest rates to fall. By reducing interest rates, the cost of borrowing decreases, which can stimulate borrowing and spending, helping to boost economic activity.

Another approach taken by the Federal Reserve is to increase interest rates. Higher interest rates can discourage borrowing and spending, which can help to reduce inflationary pressures.

However, it is important to note that the Federal Reserve does not institute price controls as a way to reduce inflation. Price controls involve setting limits on the prices of goods and services, and this is typically not a measure used by the Federal Reserve.