If There Is a Recession, the Fed Would Most Likely

question 85

Multiple Choice

If there is a recession, the Fed would most likely

• A) increase bank reserves by raising the discount rate.
• B) increase bank reserves by buying government securities.
• C) decrease bank reserves by raising the discount rate.
• D) decrease bank reserves by selling government securities.
• E) decrease bank reserves by lowering the legal reserve requirement.

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Definitions:

Motor Nerves

Nerves that transmit impulses from the central nervous system to muscles, causing movement.

Central Nervous System

The part of the nervous system consisting of the brain and spinal cord, which serves as the primary control center for processing and sending out information.

Internal Organs

Organs located inside the body that perform essential functions, such as the heart, liver, and kidneys.

Inhibitory Neurotransmitter

A type of neurotransmitter that decreases the likelihood of the neuron it binds to firing an action potential.