The Fed's countercyclical policy tools to eliminate a recession include lowering:
A) the required reserve ratio, cutting the discount rate, and selling government bonds on the open market.
B) the required reserve ratio, raising the discount rate, and selling government bonds on the open market.
C) the required reserve ratio, raising the discount rate, and buying government bonds on the open market.
D) the discount rate, cutting the discount rate, and raising the margin requirement.
E) the reserve requirement, lowering the discount rate, and buying government bonds on the open market.

Question

Quizplus · Accepted Answer

Lowering the reserve requirement, lowering the discount rate, and buying government bonds are expansionary monetary policies used by the Fed to increase money supply and stimulate economic activity during a recession.

The Fed's Countercyclical Policy Tools to Eliminate a Recession Include