Which statement is true?

Question

Quizplus · Accepted Answer

During periods of severe inflation, the Fed tries to push up interest rates to reduce the money supply and curb inflation. Option A is incorrect as open market operations are regularly conducted. Option B is incorrect as while the discount rate is one tool used by the Fed, it is not the basic way the Fed controls the money supply. Option C is also incorrect as during periods of recession, the Fed typically tries to lower interest rates to stimulate borrowing and spending.

Which Statement Is True