If the unemployment rate is 10% and the inflation rate is 2%,the Fed will most likely:
A) raise the discount rate.
B) buy bonds.
C) lower the reserve requirement.
D) sell bonds.

Question

Quizplus · Accepted Answer

With a high unemployment rate of 10% and a low inflation rate of 2%, the Fed is likely to pursue an expansionary monetary policy to stimulate economic growth and reduce unemployment. Buying bonds increases the money supply, lowers interest rates, and encourages borrowing and investment.

If the Unemployment Rate Is 10% and the Inflation Rate