Which of the following is true about the Federal Reserve and its ability to prevent recessions? The Federal Reserve
A)does not try to eliminate recessions,but instead focuses on preventing inflation.
B)can fine tune the economy and realistically hope to keep the economy from experiencing recessions.
C)cannot realistically fine tune the economy,but seeks to keep recessions shorter and milder than they would otherwise be.
D)cannot realistically fine tune the economy and has little to no effect on the magnitude and length of recessions.

Question

Quizplus · Accepted Answer

The Federal Reserve cannot realistically fine tune the economy, but it seeks to keep recessions shorter and milder than they would otherwise be by using monetary policy tools like interest rate adjustments and quantitative easing. However, it cannot completely eliminate recessions or control their magnitude and length.

Which of the Following Is True About the Federal Reserve