If the Fed is concerned about a possible recession, it_{--------------------} the federal funds rate, which_{--------------------} the quantity of reserves and_{--------------------} the amount of bank loans. A)raises; decreases; decreases B)lowers; increases; increases C)lowers; decreases; decreases D)raises; increases; increases E)lowers; increases; decreases

Question

Quizplus · Accepted Answer

When the Fed is concerned about a recession, it typically lowers the federal funds rate to make borrowing cheaper, which increases the quantity of reserves and encourages banks to increase the amount of loans they provide.

If the Fed Is Concerned About a Possible Recession, It--------------------

If the Fed Is Concerned About a Possible Recession, It_{--------------------}