To increase the level of output, the Fed should conduct an open market sale.

Question

Quizplus · Accepted Answer

To increase the level of output, the Fed should conduct an open market purchase, not a sale. When the Fed conducts an open market purchase, it injects money into the economy and increases the money supply, leading to lower interest rates and increased borrowing and spending by consumers and businesses. This, in turn, can increase output and stimulate economic growth. On the other hand, an open market sale would decrease the money supply, increase interest rates, and potentially slow down economic activity.

To Increase the Level of Output, the Fed Should Conduct