Which of the following is a relevant monetary policy during an acute financial crisis in an economy?

Question

Quizplus · Accepted Answer

During an acute financial crisis, lowering nominal interest rates is a relevant monetary policy option as it can stimulate borrowing and spending, promoting economic activity and potentially preventing further economic downturn. Increasing investment in foreign government bonds or revaluing domestic currency may not address the immediate financial crisis within the economy. Increasing reserve requirements for commercial banks may be appropriate in some circumstances, but it may also restrict lending and worsen the crisis.

Which of the Following Is a Relevant Monetary Policy During