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Between 2022 and 2023, the Federal Reserve raised short term interest rates several times in order to fight inflation. How did they think this action
Between 2022 and 2023, the Federal Reserve raised short term interest rates several times in order to fight inflation. How did they think this action would reduce inflation? (O Higher interest rates increase bank profits and so fewer banks will fail (O Higher interest rates on their savings would make consumers richer and so they would be able to afford the higher prices (O Higher interest rates would make the dollar stronger and a stronger dollar would increase net exports (O Higher interest rates would reduce investment and this would reduce aggregate demand. Higher interest rates would also strengthen the dollar and reduce net exports; this would also reduce aggregate demand
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