quiz\nquestion 5 of 10\nwhy would a government’s central bank raise interest rates when inflation is…

quiz\nquestion 5 of 10\nwhy would a government’s central bank raise interest rates when inflation is high?\nto encourage people to spend less which can bring prices down\nto encourage people to spend more which can bring prices down\nto encourage people to spend less to increase demand and push prices up\nto encourage people to spend more to increase demand and push prices up

quiz\nquestion 5 of 10\nwhy would a government’s central bank raise interest rates when inflation is high?\nto encourage people to spend less which can bring prices down\nto encourage people to spend more which can bring prices down\nto encourage people to spend less to increase demand and push prices up\nto encourage people to spend more to increase demand and push prices up

Answer

Brief Explanations:

When inflation is high, central banks raise interest - rates. Higher interest rates make borrowing more expensive and saving more attractive. This encourages people to spend less. With less demand, prices tend to come down as per the basic law of supply and demand in economics.

Answer:

To encourage people to spend less which can bring prices down