If the Fed wants to stimulate an economy,it will ________.
A) sell Treasury bonds
B) lower short-term interest rates
C) increase the quantity of required reserves
D) reduce money supply

Question

Quizplus · Accepted Answer

Lowering short-term interest rates is one of the tools the Federal Reserve uses to stimulate the economy. By reducing borrowing costs, individuals and businesses are more likely to borrow and spend money, leading to increased economic activity. Selling Treasury bonds, increasing the quantity of required reserves, and reducing the money supply are all contractionary measures, aimed at slowing down an overheating economy.

If the Fed Wants to Stimulate an Economy,it Will ________