Question

based on a negative gdp report, unemployment rising, and inflation rising, what should be the proper monetary policy response?
lowering interest (discount) rates
increasing interest (discount) rates
increasing the reserve requirement
selling government securities

Explanation:

The scenario describes stagflation: negative GDP (economic contraction), rising unemployment, and rising inflation. Standard expansionary monetary policy (lowering rates) stimulates growth and reduces unemployment, while contractionary policies (raising rates, increasing reserves, selling securities) target inflation but worsen growth/unemployment. Prioritizing reversing the economic downturn and job losses, the appropriate response is expansionary policy.

Answer:

lowering interest (discount) rates