Question

suppose the federal reserve decides to decrease the money supply in order to lower inflation. in three or four sentences, explain if this is an expansionary or contractionary policy.

Answer 1

What will happen is that diminishing the supply of cash will raise loan costs, in this manner diminish the measure of financial action, specifically venture and customer spending. This will prompt a general abatement popular for products and enterprises, achieving a decline in costs, or all the more normally, a littler increment in costs.