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13 April, 05:34

During a period of high inflation, what government actions can preserve the value of money? Select two options. forcing producers to sell at a certain price selling gold for use as an alternate currency restricting the money supply by adjusting interest rates providing increased benefits to people harmed by inflation decreasing the demand for money by lowering the price of real estate

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  1. 13 April, 06:48
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    Option (3) = > restricting the money supply by adjusting interest rates.

    Option (5) = > decreasing the demand for money by lowering the price of real estate.

    Explanation:

    The term "inflation" is used to describe the period of time in which the economy of a country is down and during this period of time the value of the currency of the country witnessing inflation decreases and the prices of goods and services in the country Increases.

    The government of such country witnessing inflation will the propose a policy in order to decrease the total amount of money in circulation and this kind of policy is know as contractionary monetary policy. The total money is circulation can be decreased by increasing the rates regarding interest (hence option 3 is correct).
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