Recall a Time When the Economy Was Very Strong for Several

Multiple Choice

Recall a time when the economy was very strong for several years, and business was booming. During that time, however, prices began to increase, and there was fear that the increase may have continued for an extended period of time. Which of the following actions could the Fed have taken to counteract the increasing prices?

A) Raise the discount rate.
B) Lower the reserve requirement.
C) Buy government bonds.
D) Increase the overall supply of money.
E) Decrease overall interest rates.