The Federal Reserve's response to the 2001 recession was to
A) cut the federal funds rate over a three-year period.
B) lower the reserve requirement.
C) raise the margin requirement and lower the reserve requirement.
D) lower the money supply by 7% in order to reduce overinflated stock prices.

Question

Quizplus · Accepted Answer

The Federal Reserve cuts the federal funds rate to expand the money supply and counteract a recession with lower interest rates.

The Federal Reserve's Response to the 2001 Recession Was to