33
QuizMultiple Choice

N/A — Exam

Question 33 • CMS 2026-2027 Economics and Personal Finance HONORS INITIAL CREDIT

The Fed may respond to a recession by

Answer
A
decreasing government spending.
B
decreasing interest rates.
C
discouraging consumer borrowing.
D
decreasing available credit.

Explanation

During a recession, the Fed may use expansionary monetary policy to encourage spending and investment. Lowering interest rates makes borrowing less expensive for consumers and businesses, which can help increase economic activity. The correct choice is decreasing interest rates.

AI-written and checked against the verified answer.

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