Question

People are slowing down their spending and holding onto their money, causing a sluggish economy. What is one way to

stimulate the economy?
Require commercial banks to purchase T-bills from the Federal Reserve
Sell T-sits to commercial banks
Decrease the reserve requirements at banks.
Raise the discount rate.

Answer 1

decrease reserve requirements

Step-by-step explanation:

if banks don't need to keep on hand as much cash in reserve, they will loan that money out, which allows people to build houses, start businesses, or do other activities that generate economic activity like purchases, sales, hires, etc