Question

Is there is a recession, the fed will

Lower the RR

Keep the RR the same

Raise the RR

Answer 1

In the event of a recession, the Federal Reserve (the Fed) typically lowers the reserve requirement ratio (RR) or keeps it the same, rather than raising it. Lowering the reserve requirement can encourage banks to lend more money, which can help stimulate the economy by increasing the overall money supply and encouraging spending and investment.

So, the most likely action in a recession would be to **lower the RR**.