Which of the following federal agencies is responsible for managing inflation? Choices: World Trade Organization, Federal Reserve Board, Department of Housing and Urban Development, International Monetary Foundation

Expert Answers

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Of these choices, the only possible answer is the Federal Reserve Board, better known as the Fed.

First of all, the WTO and the IMF are not even agencies of the United States government.  They are mulitnational organizations.

One major role of the Fed is to control the money supply of the United States.  It does this by such things as controlling interest rates and buying and selling government securities.  When the Fed does these things, it raises or lowers the amount of money that is in the US economy.  One major purpose of this monetary policy is to prevent inflation from becoming either too high or too low.

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