To counter a recession, the Fed will take _____ measures to increase the money supply and reduce interest rates.
A) contractionary
B) expansionary
C) deflationary
D) inflationary

Question

Quizplus · Accepted Answer

To counter a recession, the Fed will take expansionary measures to increase the money supply and reduce interest rates. This is done to encourage borrowing and spending and stimulate economic growth. Contractionary measures are used to slow down an overheating economy, while deflationary and inflationary measures are used to combat specific economic problems related to falling prices and rising prices, respectively.

To Counter a Recession, the Fed Will Take _____ Measures