If the unemployment rate is 10% and the inflation rate is 2%, the Federal Reserve will most likely:
A) raise the discount rate.
B) buy bonds.
C) lower the reserve requirement.
D) sell bonds.

Question

Quizplus · Accepted Answer

When unemployment is high and inflation is low, the Federal Reserve is likely to adopt an expansionary monetary policy to stimulate the economy, which includes buying bonds to increase the money supply and lower interest rates.

If the Unemployment Rate Is 10% and the Inflation Rate