If saving is less than investment, the appropriate countercyclical monetary policy would be:
A)a cut in the reserve requirement.
B)a cut in the discount rate.
C)an open market sale of government bonds.
D)a cut in the federal funds rate.

Question

Quizplus · Accepted Answer

An open market sale of government bonds would reduce the money supply and increase interest rates, which would discourage investment and encourage saving.

If Saving Is Less Than Investment, the Appropriate Countercyclical Monetary