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- You have the assignment of making a recommendation to the Chairman of the Fed during a period of persistent, high inflation. What could you do to restore stable prices?During the early months of the pandemic, the inflation rate fell well below the 2% target which would have alerted the Federal Reserve Bank to take action. Why was that the case? Did the Fed have anything to do with that process?Which statement explains how the Federal Reserve can control rising inflation?
- Knowing how the Federal Reserve works, why do people say the FED pumps money into the economy and cause inflation?In order to manipulate the inflation rate in the United States, the Federal Reserve lowers the federal funds rate. What will occur as a result? Select all that apply.Explain how inflation can be “built into the system.