The Federal Reserve uses its tools to counteract

Question

Quizplus · Accepted Answer

The Federal Reserve uses its tools to counteract both booms and recessions. During a boom, the Fed may use tools such as raising interest rates and implementing restrictive monetary policy to slow down economic growth and prevent inflation. During a recession, the Fed may use expansionary monetary policy to stimulate the economy by lowering interest rates and increasing the money supply. The Fed's goal is to maintain a stable and healthy economy, which requires countering both booms and recessions. While the Fed may also take action during severe depressions, this is not the only time they use their tools.

The Federal Reserve Uses Its Tools to Counteract