Homework Sourse26 Which of the following is a traditional tool used by the
26.
Which of the following is a traditional tool used by the Fed during recessions?
| buy treasury bonds from commercial banks in the open market |
Solution
Answer is Buy Treasury bonds from commercial banks in the open market.
Explanation:
In the period of recession, the Fed may buy the treasury bonds from the commercial banks this increases the money supply with the banks and ultimately to the public at large which will help in resolving the problem to some extent.
