What will happen when the Fed tightens monetary policy?

Question

What will happen when the Fed tightens monetary policy?

Answer 1

A) The Economy Slows

B) The US Dollar Increases in Value

C) Inflation is brought under control.

Answer 2

They can't if they do the whole house of cards will collapse . Faster then it is already .

Answer 3

There would be less inflation.  However, the economy would slow down.  Those suffering from the mortgage crisis now would be deeply hurt if int. rates were raised.  Now if it loosened/eased its policy, the economy would grow more.  However, that would come at the expense of more inflation.

Two differnet problems (inflation- growth) with bad consequences. hope i helped.