Question

which of the following actions would the federal reserve most likely pursue to combat a recession?
increasing the discount rate
increasing the money supply
decreasing the money supply
selling bonds on the open market

Explanation:

During a recession, the Federal Reserve uses expansionary monetary policy to stimulate economic activity. Increasing the discount rate, decreasing the money supply, and selling bonds are contractionary policies that slow the economy. Increasing the money supply lowers interest rates, encourages borrowing and spending, which boosts economic growth.

Answer:

B. Increasing the Money Supply