If the economy has high levels of unemployment, the Federal Reserve will

Question

Quizplus · Accepted Answer

The Federal Reserve would reduce interest rates as a way to encourage borrowing and spending, which would stimulate economic growth and job creation. Lowering taxes or increasing government spending could also be options, but those decisions are made by the government, not the Federal Reserve. Raising interest rates would have the opposite effect of reducing borrowing and spending, and would likely worsen unemployment levels.

If the Economy Has High Levels of Unemployment, the Federal