e The Federal Reserve could engage in open market operations, buying or selling government securities to adjust the money supply in the economy.
f The Federal Reserve could adjust the reserve requirement, specifying the minimum amount of reserves that banks must hold, to influence the amount of money that can be lent out.
g The Federal Reserve could provide forward guidance on its monetary policy decisions to provide certainty and stability to financial markets.
h The Federal Reserve could use quantitative easing, purchasing long-term securities to lower long-term interest rates and stimulate economic activity.
What methods could the Federal Reserve use to stabilize the economy?
a The Federal Reserve provides loans to banks that cannot obtain loans to prevent shortages in cash.
b The Federal Reserve issues money to individuals to stimulate the economy.
c The Federal Reserve prevents banks from lending who do not have the reserves to lend.
d The Federal Reserve increases interest rates to incentivize banks to lend.
1 answer
1 answer