The economy is currently experiencing high inflationary pressure with low unemployment and steady GDP growth. Which of the following would be a plausible course of action?(1 point) Responses The Federal Reserve should use monetary policy and raise the reserve requirement, decreasing the money supply The Federal Reserve should use monetary policy and raise the reserve requirement, decreasing the money supply The Federal Reserve should use fiscal policy to raise interest rates to encourage spending The Federal Reserve should use fiscal policy to raise interest rates to encourage spending Congress should buy government bonds to increase the money supply using monetary policy Congress should buy government bonds to increase the money supply using monetary policy Congress should use fiscal policy to lower taxes and encourage spending
The most plausible course of action in this scenario would be for the Federal Reserve to use monetary policy and raise the reserve requirement, decreasing the money supply. This would help to curb inflationary pressures by reducing the amount of money available for spending and lending in the economy.
