When inflation is **high**, the Federal Reserve (commonly referred to as the FED) aims to slow the economy. High inflation occurs when the prices of goods and services rise significantly over a period of time, which can erode purchasing power and lead to economic instability. In response to elevated inflation rates, the FED typically utilizes monetary policy tools, such as increasing the federal funds rate, to cool off economic activity.

By raising interest rates, borrowing costs rise, which can lead to reduced spending on big-ticket items and lower investment by businesses. This generally results in a slowdown in economic growth, thereby helping to contain inflation. The objective is to stabilize prices while still allowing for economic growth and employment opportunities, maintaining a balance that fosters a healthy economy.

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When inflation is **high**, the Federal Reserve (commonly referred to as the FED) aims to slow the economy. High inflation occurs when the prices of goods and services rise significantly over a period of time, which can erode purchasing power and lead to economic instability. In response to elevated inflation rates, the FED typically utilizes monetary policy tools, such as increasing the federal funds rate, to cool off economic activity.

By raising interest rates, borrowing costs rise, which can lead to reduced spending on big-ticket items and lower investment by businesses. This generally results in a slowdown in economic growth, thereby helping to contain inflation. The objective is to stabilize prices while still allowing for economic growth and employment opportunities, maintaining a balance that fosters a healthy economy.

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When inflation is **high**, the Federal Reserve (commonly referred to as the FED) aims to slow the economy. High inflation occurs when the prices of goods and services rise significantly over a period of time, which can erode purchasing power and lead to economic instability. In response to elevated inflation rates, the FED typically utilizes monetary policy tools, such as increasing the federal funds rate, to cool off economic activity.

By raising interest rates, borrowing costs rise, which can lead to reduced spending on big-ticket items and lower investment by businesses. This generally results in a slowdown in economic growth, thereby helping to contain inflation. The objective is to stabilize prices while still allowing for economic growth and employment opportunities, maintaining a balance that fosters a healthy economy.

When inflation is _______ the FED aims to slow the economy?

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When inflation is _______ the FED aims to slow the economy?

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