During a severe downturn in the economy, a central bank would be most likely to

Question

Quizplus · Accepted Answer

During a severe downturn in the economy, the central bank's main objective would be to stimulate economic activity and boost spending. This can be achieved by cutting interest rates and increasing liquidity in the markets so that businesses and consumers have access to credit and are incentivized to borrow and spend. By doing so, the central bank can help to stimulate the economy and prevent a full-blown recession. Therefore, choice (B) is the best option.

During a Severe Downturn in the Economy, a Central Bank