The chairman of the Federal Reserve Board can accelerate economic activity by lowering interest rates.What primary method does the Federal Reserve use to accomplish this?

Question

Quizplus · Accepted Answer

The primary method used by the Federal Reserve to lower interest rates and stimulate economic activity is through open market operations. In this process, the Federal Reserve buys government securities from banks, which increases the supply of money in the economy and lowers interest rates. Selling margin requirements, increasing the discount rate, and increasing reserve requirements all have the opposite effect of reducing the money supply and increasing interest rates.

The Chairman of the Federal Reserve Board Can Accelerate Economic