Question

In the late 1970s the rate of inflation was very high, exceeding 10% in 1979 and 1980. As a result, the Federal Reserve used __________ to raise the federal funds rate.

Answer 1

In the late 1970s the rate of inflation was very high, exceeding 10% in 1979 and 1980. As a result, the Federal Reserve used Tight monetary policy to raise the federal funds rate.

What is the rate of inflation?

Rate of inflation is the increase in price in a given period of time. Inflation is usually described as a wide measure of price increases or increases in the cost of living in a nation.

Example of Inflation goes up when prices increase, reducing your dollar's buying power.

Thus, it is Tight monetary policy.

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