Question

If the United States falls into a recession, which action would the Federal Reserve take to encourage employment?

Answer 1

The correct answer is buy government securities, because there will be the injection of state money into the economy, expanding the demand for production and requiring more staff in service.

Answer 2

Step-by-step explanation: if the United States falls into a recession the immediate action the Federal Reserve would take is that it will Buy government bonds to encourage employment and to pump money in the economy. When the Federal Reserve will buy the bonds, this will release money into the economy, interest rate will decline and people will now take loans from the banks and will have more money to spend. Demand and supply will increase and the business generated in the economy will increase employment.