In order to prevent inflation the federal government can manipulate _____. group of answer choices excise tax levels progressive taxation regressive taxation interest rates

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02-08-2022
Social Studies

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In order to prevent inflation the federal government can manipulate _____. group of answer choices excise tax levels progressive taxation regressive taxation interest rates

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HafsaM HafsaM · Answer 1 · 2022-08-10T19:10:02+02:00

In order to prevent inflation the federal government can manipulate interest rates.

Inflation is the rise in the price of goods and services. It can be either supply push inflation or demand pull inflation.

Federal government prevents inflation by manipulating the interest rates of the banks to control the money supply in the market.

Whenever there is excess of money in the market the demand increases and causes inflation, so in order to take out money from the market the government rises the interest rates of the banks.

To learn more about Interest rates here-

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