Question

what is the biggest risk when the federal reserve increases the money supply or lowers the discount rate?
○ higher unemployment
○ slowing down the economy
○ harder for borrowers to take out loans
○ increased inflation

Explanation:

When the Federal Reserve increases the money supply or lowers the discount rate, it expands the amount of money available in the economy. More money chasing the same amount of goods and services drives up prices, which is inflation. The other options are incorrect: these actions typically reduce unemployment, stimulate (not slow) the economy, and make it easier (not harder) for borrowers to get loans.

Answer:

Increased inflation