Which of the following actions would be considered loosening monetary policy?(1 point) Responses The Federal Reserve increasing interest rates The Federal Reserve increasing interest rates Congress increasing government spending Congress increasing government spending Congress lowering taxes Congress lowering taxes The Federal Reserve lowering the reserve requirement

Answer 1

Loosening monetary policy typically refers to actions taken by a central bank (such as the Federal Reserve) to stimulate the economy, often by increasing the money supply or reducing interest rates.

Among the options provided, the following action would be considered loosening monetary policy:

• The Federal Reserve lowering the reserve requirement

This action allows banks to hold less money in reserve, enabling them to lend more, thus increasing the money supply and stimulating economic activity.

The other options, such as increasing interest rates or lowering taxes, represent different forms of economic policy but are not directly considered loosening monetary policy.