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Which of these situations is most likely to cause the Fed to introduce a tight money supply?


The federal government passes a new budget with a large deficit.


The economy is expanding quickly and inflation is a concern.


The economy is prosperous with relatively low inflation and low unemployment.


A recession has reduced aggregate demand and increased unemployment.

Respuesta :

Answer:

Explanation:

The economy is expanding and inflation is a concern

millermoldwarp

Answer:  The correct answer is :  The economy is prosperous with relatively low inflation and low unemployment.

Explanation:  Generally when things are going well and the unemployment rate is at a minimum of 50 years, the Fed increases interest rates as a defense against inflation. But the Fed changed its strategy because inflation remains below the target, unemployment is low and the economy is growing at a reasonable rate.

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