719EconomicsMedium
Suppose a wave of investor and consumer pessimism in the USA causes a reduction in spending If the US federal Reserve (Which has a broader remit than the Bank of England Which is charged only with controlling inflation) chooses to engage in activist stabilization policy it should?
Adecrease interest rates
Bdecrease the money supply
Cdecrease government spending and increase taxes
DIncrease government spending and decrease taxes
Correct answer
A. decrease interest rates
Explanation
The correct answer is decrease interest rates.