Asked by Brittney Freeman on Jun 07, 2024

verifed

Verified

The conventional monetary policy to fight recessions would be to

A) increase the rate of monetary growth.
B) decrease the rate of monetary growth.
C) run a government surplus.
D) run a government deficit,increase government spending.

Monetary Policy

The process by which a central bank, like the Federal Reserve, controls the supply of money in an economy, often targeting inflation or employment levels.

Recessions

Periods of economic decline when GDP falls for two consecutive quarters, leading to a decrease in consumer spending and investment.

Government Surplus

A situation where the government's income, mainly from taxes, exceeds its expenditures within a specific timeframe, indicating fiscal health.

  • Gain an understanding of the role that governmental fiscal actions and central banking policies play in affecting recessionary periods and inflation levels.
verifed

Verified Answer

CP
Christopher PetsanasJun 12, 2024
Final Answer :
A
Explanation :
To combat recessions, conventional monetary policy involves increasing the rate of monetary growth. This is done to lower interest rates, encourage borrowing and spending, and stimulate economic activity.