During A Period Of Hyperinflation The Fed Would Probably Be Doing Each Of The Following Except?

a/ raising the discount rate.
b/ lowering reserve requirements.
c/ raising interest rates.
d/ selling securities on the open market.

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2 Responses to “During A Period Of Hyperinflation The Fed Would Probably Be Doing Each Of The Following Except?”

  1. Frank says:

    I think it’s B. To combat inflation, the Fed wants to remove the amount of dollars in the open market. Raising the discount rate means banks will borrow less money from the Fed, so it’s not A. Raising interest rates always combats inflation, that’s just how it is, and selling securities on the open market means that the Fed sells the securities, and then they get the money that paid for the securities out of circulation. So it’s B for the answer.

  2. Anjaree says:

    C and D are correct. In fact, it will do D to achieve C.

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