If the economy has high levels of unemployment,the Fed will:
A) lower taxes.
B) raise interest rates.
C) reduce interest rates.
D) increase government spending.

Question

Quizplus · Accepted Answer

When the economy has high levels of unemployment, the Fed will typically reduce interest rates to encourage borrowing and stimulate economic activity. Lower interest rates can also make it easier for businesses to expand and hire more workers. Lowering taxes or increasing government spending may also help stimulate the economy, but these are typically policy decisions made by the government rather than the Fed. Raising interest rates would be counterproductive in this scenario, as it would make borrowing more expensive and slow down economic activity even further.

If the Economy Has High Levels of Unemployment,the Fed Will