In the case of a recession, which of the following might the Fed do to counter the financial situation?
A)Increase taxes
B)Decrease taxes
C)Increase government spending
D)Purchase bonds

Question

Quizplus · Accepted Answer

In case of a recession, the Fed might purchase bonds to counter the financial situation.
Key Takeaway: When moving from the peak to the trough, economists say that the economy is experiencing a recession. Bonds are basically certificates that represent money a government or corporation has borrowed from other entities. In order to counter a recession, the Fed should create expansionary fiscal policies that help to stimulate the economy. Purchasing bonds is one way they might do this.

In the Case of a Recession, Which of the Following