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Suppose an increase in interest rates causes rising unemployment and falling output. to counter this, the federal reserve would a. increase the money supply. b. increase government spending. c. decrease
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Suppose an increase in interest rates causes rising unemployment and falling output. to counter this, the federal reserve would

a. increase the money supply.
b. increase government spending.
c. decrease the money supply.
d. decrease government spending.

User Noun
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most likely A) increase money supply, because they are capitalism economy. The federal reserve is in charge of all the country's Capitol, or: resources and money.
(but for a country that is more sympathetic to the people it would be B) because it would increase social security nets like welfare)
User Ramesh Akula
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