To reduce inflation the fed must use selector, Ask an Expert

Management Studies

To reduce inflation, the Fed must use selector 1

expansionary
contractionary

policy. In the short run, the economy moves from point A to point selector 2

. In the long run, the economy will move to point selector 3

. This illustrates that the costs of reducing inflation are selector 4

permanent
temporary

and the benefits of reducing inflation are selector 5

permanent
temporary

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