Question

why did the federal reserve allow interest rates to rise in 1979?
to reduce borrowing costs
to encourage inflation
to reduce unemployment
to fight inflation
complete
choose the right word or phrase to complete this sentence.
the fed’s interest - rate policy in the late 1970s ______ economic growth.
encouraged
slowed
sped up

Explanation:

In the late 1970s, the Federal Reserve raised interest rates sharply to combat high inflation. Higher interest rates make borrowing more expensive, which reduces consumer and business spending, in turn slowing economic growth as a trade-off to lower inflation.

Answer:

1. To fight inflation
2. slowed