Question

Explain whether you agree or disagree with the Federal Reserve taking action to intervene when the...

Explain whether you agree or disagree with the Federal Reserve taking action to intervene when the economy is not well-functioning. Why do you agree or why do you not agree?

Homework Answers

Answer #1

It can be mentioned that I would agree the intervention of Federal Reserve when economy is not functioning and this is because the economy might not be functioning due to various reasons and take one such reason as the lack of funds and in this regard in order to solve the problem if the Federal Reserve intervenes and reduce the federal funds rate so that the discount rate of the interest rate also decreases as a result of which people would be motivated to borrow more on the whole and this can stimulate the condition of the businessmore and the Federal Reserve doesn't act then the condition can become even worse and that is the reason why such conditions and actions might trigger the economic activity as desired only one Federal Reserve acts.

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