During a severe recession,appropriate economic policy might include
A)An open market purchase by the Fed,a decrease in the discount rate,or a decrease in government regulation.
B)An open market sale by the Fed,a decrease in the discount rate,or an increase in the budget deficit.
C)A decrease in government spending,a decrease in the discount rate,or a decrease in government regulation.
D)An open market purchase by the Fed,a decrease in the tax rates,or a decrease in the budget deficit.

Question

Quizplus · Accepted Answer

During a severe recession, appropriate economic policy aims to stimulate economic activity. An open market purchase by the Fed increases the money supply, lowering interest rates and encouraging borrowing and spending. Decreasing the discount rate makes it cheaper for banks to borrow from the central bank, encouraging lending. Decreasing government regulation can stimulate economic activity by making it easier for businesses to operate and expand.

During a Severe Recession,appropriate Economic Policy Might Include