war based
2007-05-13 12:16:32 · 3 answers · asked by Barrett E 2 in Education & Reference ➔ Homework Help
The Fed often uses the prime lending rate to nudge inflation in the direction they feel it needs to go. If spending is getting too rampant, thus increasing demand and causing prices to rise, they can curtail it by raising the rate. If people are being too cautious and hoarding their money, they can stimulate the econonmy by lowering the rate, thus enticing people to invest and spend their money.
2007-05-13 19:27:25 · answer #1 · answered by Anonymous · 0⤊ 0⤋
A government's central bank can control the money supply. An increase in the money supply will fuel inflation as the increase puts more money into circulation, which results in more money being spent, which causes prices to rise, because of increased demand for good and services.
2007-05-13 19:26:33 · answer #2 · answered by Robert L 7 · 0⤊ 0⤋
They can threaten to eliminate these huge oil companies tax cuts unless they lower their profit margins... which would in turn decrease the price of gasoline... that might work... their thirst for profits (excessive greed in my book) is causing the price of everything else to rise !!!
2007-05-13 19:27:42 · answer #3 · answered by Anonymous · 0⤊ 1⤋