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Answers should be 2 pages. Use evidence in your analysis when possible.
The Federal Reserve Bank is worried about Covid relief spending causing inflation and wants to reduce inflationary pressures.
A. Describe how the Covid relief spending could possibly cause inflation (the mechanism by which it could cause prices to go up).
B. What policy tools could the Federal Reserve Bank use to reduce inflationary pressures and how would they work?
C. Describe how the actions you describe in parts A and B could affect your Industry? Be as specific as possible.
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