If the Fed is concerned with a potential recession, what course of action should it take?
A) Lower the reserve requirement and sell securities.
B) Lower the discount rate and increase the reserve requirement.
C) Sell securities and lower the discount rate.
D) Buy securities and lower the discount rate.
E) Buy securities and increase the reserve requirement.

Question

Quizplus · Accepted Answer

D) Buying securities and lowering the discount rate increases the money supply, which encourages spending.

If the Fed Is Concerned with a Potential Recession, What