What would be a way for the Federal Reserve to stimulate a sluggish economy?
A) print more money
B) buy government bonds on the open market
C) sell more government bonds
D) encourage the stock market

Question

Quizplus · Accepted Answer

Buying government bonds on the open market increases the money supply in the economy, which can stimulate economic activity by making it easier for individuals and businesses to borrow money at lower interest rates. This can lead to more spending, investment, and job creation. Printing more money can also increase the money supply, but it can also lead to inflation and devalue the currency. Selling more government bonds can have the opposite effect, reducing the money supply and potentially slowing down economic growth. Encouraging the stock market can also have stimulative effects on the economy, but it is not an action that the Federal Reserve can directly control.

What Would Be a Way for the Federal Reserve to Stimulate