In order to combat a recession,the Fed will ________ the federal funds rate thereby ________ the quantity of money.

Question

Quizplus · Accepted Answer

To combat a recession, the Fed will lower the federal funds rate, thereby increasing the quantity of money. Lowering the federal funds rate makes borrowing cheaper, which encourages businesses and consumers to spend more, thereby increasing the quantity of money circulating in the economy.

In Order to Combat a Recession,the Fed Will ________ the Federal