which statement best describes how the fed responds to recessions?\n○ it sells more securities.\n○ it…

which statement best describes how the fed responds to recessions?\n○ it sells more securities.\n○ it charges banks more interest.\n○ it increases reserve requirements.\n○ it increases the money supply.

which statement best describes how the fed responds to recessions?\n○ it sells more securities.\n○ it charges banks more interest.\n○ it increases reserve requirements.\n○ it increases the money supply.

Answer

Answer:

D. It increases the money supply.

Brief Explanations:

During a recession, the Federal Reserve (Fed) aims to stimulate the economy. Increasing the money supply (through actions like buying securities, lowering interest rates, or reducing reserve requirements) increases the amount of money available for lending and spending, which can boost economic activity. Selling securities, charging banks more interest, or increasing reserve requirements would have the opposite effect (reducing money supply) and are actions taken to combat inflation, not recession.