Principles of Economics.

The Federal Reserve Bank (the “Fed”) is the central bank of the United States. One of its jobs is to manage the money supply. Sometimes it increases the money supply. Sometimes it decreases the money supply.

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  • Name at least one action that the Fed could take to reduce the money supply and raise interest rates.
  • Given our current economy, would you recommend that the Fed reduce the money supply and raise interest rates, or expand the money supply and lower interest rates? Please explain.

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