Use this image to answer the following question. When the economy is operating at point B, the Federal Reserve may increase the discount rate to

decrease inflation.

increase inflation.

decrease growth.

increase growth.

Question

Use this image to answer the following question. When the economy is operating at point B, the Federal Reserve may increase the discount rate to

 decrease inflation.

 increase inflation.

 decrease growth.

 increase growth.

anonymous · Answer

attachment

anonymous · Answer

To decrease inflation.
As Real GDP rises, prices will rise (as inflation and growth interact)
If you add a discount rate, the price drops, as well as inflation (which is an economy's aim ~ to reduce inflation).