To fight a recession the Fed will

Question

Quizplus · Accepted Answer

Lowering the federal funds rate is a common tool used by the Federal Reserve to stimulate economic growth and counteract recessions. Lower interest rates make it less expensive for businesses and consumers to borrow money, which can encourage spending and investment. Decreasing taxes or increasing the budget deficit can also have expansionary effects, but those policies are primarily the responsibility of fiscal policymakers (i.e. Congress and the President) rather than the Fed. Raising the federal funds rate would be contractionary and could exacerbate a recession.

To Fight a Recession the Fed Will