Question

Describe the tools that the Federal Reserve can use to influence aggregate demand to stimulate the economy out of the recession

Answer 1

Monetary Policy.

Step-by-step explanation:

The Federal Reserve will use its monetary policy to influence the aggregate demand. Moreover, the monetary policy includes different tools to monitor the money supply in the economy like bank rate, open market operations, reserve requirement, etc. Since the recession period is the period of an economic slowdown. Thus, the Federal Reserve will increase the purchasing power of people by injecting the money or increasing the money supply in the economy.