Multiple Choice
High inflation can spiral out of control when
A) expected inflation increases nominal interest rates,causing the Fed to buy bonds,increasing the money supply and further increasing inflation.
B) expected inflation decreases nominal interest rates,causing the Fed to buy bonds,increasing the money supply and further increasing inflation.
C) expected inflation increases nominal interest rates,causing the Fed to sell bonds,increasing the money supply and further increasing inflation.
D) expected inflation decreases nominal interest rates,causing the Fed to sell bonds,increasing the money supply and further increasing inflation.
Correct Answer:
Verified
Correct Answer:
Verified
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