Answer:
You work for the Federal Reserve setting Monetary Policy. The United States economy is currently in a recession, a period of economic slow-down. The country is experiencing high levels of unemployment and prices are starting to rise due to inflation. The overall GDP of the country is falling rapidly, and there is no end in sight. Without intervention from the Fed, the United States could enter a period of economic depression.
• Describe three actions that the Federal Reserve could take in order to improve the economic outlook of the country.
• Explain how each action would impact the U.S. economy.
• Use details and examples to supper your answer.
The federal reserve could, 1. Lower the discount rate, 2. Buy government securities and bonds, and 3. Lower the reserve requirement. Lowering the discount rate makes it cheaper for commercial banks to borrow money, which results in an increase in available credit and lending activity throughout the economy. Also, buying government securities and bonds would increase the money supply in the economy by swapping out bonds in exchange for cash to the general public. Conversely, if the Fed sells bonds, it decreases the money supply by removing cash from the economy in exchange for bonds. and finally lowering the reserve requirement lowers the amount of cash that banks are required to hold in reserves, allowing them to make more loans to consumers and businesses. This increases the nation's money supply and expands the economy. By doing this, the federal reserve could stimulate the economy back to a more stable state and stop or at least delay an economic depression.
Step-by-step explanation:
here, feel free to replace some words if you would like