What type of monetary measures are needed to control inflation?
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Inflation is generally controlled by the Central Bank and/or the government. The main policy used is monetary policy – set by Central Banks. However, in theory, there are a variety of tools to control inflation including: Monetary policy – Setting interest rates.
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=> Governments can use wage and price controls to fight inflation, but that can cause recession and job losses. Governments can also employ a contractionary monetary policy to fight inflation by reducing the money supply within an economy via decreased bond prices and increased interest rates.
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