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If the economy is in decline, and the federal reserve wants to encourage banks to lend to consumers, which step will the fed likely take?
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10 votes
10 votes
If the economy is in decline, and the federal reserve wants to encourage banks to lend to consumers, which step will the fed likely take?

User Amirh
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1 Answer

13 votes
13 votes

Answer:

Expansionary monetary policy

Step-by-step explanation:

When the economy is on a decline, the federal reserve reduces interest rates in the banking system to increasing lending and borrowing which props up economic activities.

User Flen
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