The government can slow down the economy by raising the reserve requirement, discount rate, or decreasing spending.
The government can slow down the economy by raising the reserve requirement, raising the discount rate, or decreasing spending. When the government raises the reserve requirement for banks, it limits the amount of money available for lending, which reduces economic activity. Similarly, increasing the discount rate makes borrowing more expensive for banks, leading to reduced lending and economic slowdown. Lastly, cutting government spending can decrease the flow of money in the economy, resulting in a slowdown.
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