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To keep high inflation from eroding the value of money, monetary authorities in the United States: control the supply of money in the economy.
What is Inflation?
Inflation exists as a general increase in the prices of goods and services in an economy. When the general price class rises, each unit of currency buys fewer goods and services; therefore, inflation corresponds to a decrease in the purchasing power of money.
The authority tasked with controlling the inflation level in the united states is the Federal Reserve or only the Fed. The Fed applies monetary policies to maintain inflation within the desired levels of around 2 percent. The Fed restrains the money and credit supply in the economy to keep inflation in check.
When inflation stands high, the prices of goods and services tend to rise, corrupting the value of a currency. In such instances, the Fed will raise interest rates to create the cost of borrowing expensive. If households and firms stand discouraged from accessing credit, the money supply in the economy is determined, which in turn obtains down the rate of inflation.
The complete question is,
To keep high inflation from eroding the value of money, monetary authorities in the United States:
A. create token money that is less than its intrinsic value.
B. make paper money legal tender for the payment of debt.
C. establish insurance on checkable deposit accounts.
D. control the supply of money in the economy.
To learn more about Inflation refer to:
https://brainly.com/question/850547
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To keep high inflation from eroding the value of money, monetary authorities in the United States: D. control the supply of money in the economy.
What is the importance of monetary policy in the economy?
The goals of monetary policy are to promote maximum employment, stable prices and moderate long-term interest rates. By executing effective monetary policy, the Fed can maintain stable prices, thereby keeping conditions for long-term economic development and maximum employment.
What are the powers of the monetary Board?
The Monetary Board wields the powers and functions of the BSP, such as the conduct of economic policy and supervision of the financial system. Its head is the BSP Governor, with five full-time members from the personal sector and one member from the Cabinet.
The complete question is shown below,
To keep high inflation from eroding the value of money, monetary authorities in the United States:
A. create token money that is less than its intrinsic value.
B. make paper money legal tender for the payment of debt.
C. establish insurance on checkable deposit accounts.
D. control the supply of money in the economy.
To learn more about monetary authorities, refer
https://brainly.com/question/13926715
#SPJ4
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