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To slow inflation the FOMC sells bonds to reduce the money supply The Fed raises interest rates so consumers will want to borrow less and spend less The Fed raises the The goal of this reserve policy is to take requirement that money out of banks have to keep circulation to so less money is decrease available aggregate demand. The Fed wants Less money in consumers to stop circulation spending money. The goal of this policy is to decrease the money supply. The goal of this policy is to slow inflation. The Fed will sell government securities to the public. TIGHT $ To decrease unemployment the FOMC buys bonds to increase the money supply The Fed lowers the reserve requirement that banks have to keep so more money is available to be borrowed and spent The Fed wants consumers to spend more money. The Fed lowers interest rates so consumers will borrow more and spend more The goal of this policy is to put money into circulation to increase aggregate demand. The goal of this policy is to increase the money supply. More money in circulation The Fed will buy government securities from the public. The goal of this policy is to promote growth and create jobs. Unemployment is high so the Fed will use this money policy This policy is used during a contraction The Fed will raise the discount rate The Fed will lower the discount rate This policy is used during rapid expansion This policy is put in place when GDP is declining This policy is put in place when GDP is drastically increasing EASY $