To stimulate the economy during a recession,the Fed would:

Question

Quizplus · Accepted Answer

To stimulate the economy during a recession, the Fed would typically reduce the reserve requirement. This means that banks would need to hold less money in reserves and would have more money to lend out, which would increase the money supply and stimulate economic activity. Cutting taxes could also be a way to stimulate the economy, but that would be a fiscal policy decision made by the government, not the Fed. Increasing the discount rate or selling government securities would have the opposite effect, as they would reduce the money supply and potentially slow down economic activity.

To Stimulate the Economy During a Recession,the Fed Would