What is Being Done to Control Inflation?
What is Being Done to Control Inflation?Answer: The primary job of the Federal Reserve is to control inflation while avoiding recession. It primarily does this by tightening or relaxing the money supply, which is the amount of money allowed into the market. Tightening the money supply reduces the risk of inflation, while relaxing controls on the money supply increases the risk of inflation. The tools it uses to accomplish this are: • Raising and lowering the Fed Funds rate, • Raising or lowering the amount of reserve requirement banks need to keep on hand. • Raising or lowering the discount rate it charges to allow ba