The Federal Reserve would be most inclined to use a stimulative monetary policy to cure a recession if oil prices are
A)low and steady.
B)low, but rising.
C)very high, but declining slightly.
D)very high and rising.

Question

Quizplus · Accepted Answer

A stimulative monetary policy is typically used to combat recession by encouraging economic growth. Low and steady oil prices help minimize inflationary pressures, making it a more favorable condition for implementing such a policy. High oil prices, whether stable, rising, or slightly declining, can contribute to inflation, making a stimulative policy less appealing due to the risk of exacerbating inflation.

The Federal Reserve Would Be Most Inclined to Use a Stimulative