If the Federal Reserve wanted to expand the supply of money to head off a recession,it could

Question

Quizplus · Accepted Answer

If the Federal Reserve decreases the reserve requirement, it allows banks to lend out more money, which increases the money supply and can stimulate economic growth. This can help to head off a potential recession. Lowering taxes or selling U.S. securities would not directly impact the money supply, and increasing the discount rate would make it more expensive for banks to borrow money from the Federal Reserve, which would likely tighten the money supply and potentially exacerbate a recession.

If the Federal Reserve Wanted to Expand the Supply of Money