Question

Suppose a country experiences a high rate of inflation due to excessive government spending and monetary expansion. The central bank wants to control inflation. Which of the following actions would be most effective in reducing inflation?  

A Reducing the interest rate to stimulate economic growth
B Increasing the money supply to accommodate inflationary expectations
C Selling government securities in the open market
D Lowering reserve requirements to encourage bank lending
E Encouraging commercial banks to reduce loan interest rates
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