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Multiple Choice Question: To reduce US inflation, the FED indirectly intervenes by: a. Weakening the value...

Multiple Choice Question:
To reduce US inflation, the FED indirectly intervenes by:
a. Weakening the value of the USD versus other currencies
b. Weakening the value of the other currencies versus the USD
c. Reducing US interest rates
d. Increasing US interest rates
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Answer #1

By increasing interest rates cost of funds become expensive causing people to borrow less the spend reducing demand in the economy. It also entices public to save more to get more interest and thus spend less reducing demand

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