4 Questions
What action could the Federal Reserve take if businesses and consumers become more optimistic about the future of the economy?
Buy bonds to lower interest rates
If the goal is to stabilize output, what action should the Federal Reserve take when there is increased optimism about the future of the economy?
Buy bonds to lower interest rates
What would be the effect of the Federal Reserve buying bonds to raise interest rates if businesses and consumers became more optimistic about the future of the economy?
Raise interest rates
How could the Federal Reserve respond to increased optimism about the future of the economy in order to stimulate economic activity?
Buy bonds to lower interest rates
Test your knowledge of the Federal Reserve's actions to stabilize the economy in response to increased optimism. Choose the correct option to understand how the Federal Reserve can use bond transactions to influence interest rates and stabilize output.
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