Question

Which of the following is done by the American government to counteract economic contraction?

Question 3 options:

It may reduce interest rates.

It decreases its own spending for goods and services.

It raises the reserve rate of banks.

It decreases the money supply.

It sells securities through the Federal Reserve Board.

Answer 1

It may reduce interest rates.

Step-by-step explanation:

To boost economic activity, the American government lower interst rates as a fiscal and expansionary policy.