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I think something the FED could do to reduce the money supply and raise interest rates is to increase the discount rate. This would cuase
I think something the FED could do to reduce the money supply and raise interest rates is to increase the discount rate. This would cuase less borrowing and more saving. I think reducing the money supply and rasing intrest rates would be the better option. IT will still enocurage people to save more money. For example this is benefical in the area of mortages because it forcing people to sell their homes for less money meaning more afordable homes. Thats just one factor. If the supply was reduced bnaks could possibly pay out more APY. So when the consumer is putting more cash in the bank the rate of their saving is increasing. This will result in more return and saftey from the devistation of inflation
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