Which of the following is done by the American government to counteract economic contraction?
A)It may reduce interest rates.
B)It decreases its own spending for goods and services.
C)It raises reserve rate of banks.
D)It decreases money supply.
E)It sells securities through the Fed.

Question

Quizplus · Accepted Answer

Reducing interest rates is a monetary policy tool used by the American government, specifically the Federal Reserve, to stimulate economic activity by making borrowing cheaper, thereby encouraging spending and investment.

Which of the Following Is Done by the American Government