Money Supply and Economic Impact

The Federal Reserve is responsible for managing the money supply in America.

Interest rates rise when the Fed limits the money supply.

Limiting the money supply leads to higher borrowing costs.

<p>The intended effect of limiting the money supply is to slow down inflation.</p> Signup and view all the answers

<p>The risk associated with limiting the money supply is that it may slow economic growth too much, leading to more unemployment.</p> Signup and view all the answers