Question

If the economy is in a recession, the central bank could do all of the following except:

a. lower taxes
b. lower the discount rate
c. lower the funds rate
d. buy securities

Answer 1

The central bank can do all of the following during a recession except for lower taxes. Lowering taxes is a fiscal policy tool, not a monetary policy tool.

Step-by-step explanation:

The central bank can do all of the following during a recession except for lower taxes. Lowering taxes is a fiscal policy tool, not a monetary policy tool, which means it is typically controlled by the government rather than the central bank. The central bank can lower the discount rate, lower the funds rate, and buy securities as part of its monetary policy measures to stimulate the economy.