Which of the following policies can be adopted by the Fed in order to stimulate an economy in the short run?

A) Increase the market interest rate
B) Purchase U.S.government securities
C) Increase the discount rate
D) Increase the price of consumer goods
E) Increase the required reserve ratio

Expansionary Monetary Policy

A policy by the central bank to increase money supply and encourage economic growth, typically through lowering interest rates.

Fed

Short for Federal Reserve, the central banking system of the United States, responsible for monetary policy.

Market Interest Rate

The prevailing rate at which borrowers can obtain loans and depositors can earn on their investments in the financial market, influenced by supply and demand forces.