During an expansion what would you do to prevent inflation? Raise the RRR , Raise the DR, Sell Bonds Lower the RRR , Lower the DR Buy Bonds

To prevent inflation during an expansion, you would typically want to implement contractionary monetary policies. Here are the actions you would take:<br /><br />1. **Raise the Reserve Requirement Ratio (RRR)**: This reduces the amount of money banks can lend out, thereby decreasing the money supply in circulation. Lower money supply can help in controlling inflation.<br /><br />2. **Raise the Discount Rate (DR)**: This is the interest rate at which commercial banks can borrow from the central bank. Raising the DR makes borrowing more expensive, which can help curb spending and slow down inflation.<br /><br />3. **Sell Bonds**: By selling government bonds, the central bank reduces the money supply in the economy. When the central bank sells bonds, it takes money out of circulation, which can help in controlling inflation.<br /><br />Therefore, the correct actions to prevent inflation during an expansion would be:<br /><br />- Raise the RRR<br />- Raise the DR<br />- Sell Bonds<br /><br />These measures collectively help in tightening the monetary policy and controlling the money supply, which is essential for preventing inflation.