If the problem in the economy is very high cyclical unemployment, we expect the Federal Open Market Committee (FOMC) to _____ interest rates to _____ spending today.
A)lower; reduce
B)lower; induce
C)raise; reduce
D)raise; induce

Question

Quizplus · Accepted Answer

Lowering interest rates is a monetary policy tool used by the FOMC to stimulate economic activity. By lowering interest rates, borrowing becomes cheaper, which can induce increased spending and investment, potentially reducing cyclical unemployment.

If the Problem in the Economy Is Very High Cyclical