In the context of monetary policy, when the economy is weak, the Fed:
A) withdraws funds from banks.
B) asks banks to cut back on the loans they make.
C) helps reduce inflationary pressures in the economy.
D) buys government securities on the open market.

Question

Quizplus · Accepted Answer

When the economy is weak, the Fed buys government securities on the open market to increase the money supply, lower interest rates, and stimulate economic activity.

In the Context of Monetary Policy, When the Economy Is