Which of the following is a tool of the Federal Reserve System?

A. Encouraging employment by lending money at a discounted rate to firms that are in danger of having to make layoffs.
B. Reducing the burden of household debt by capping credit card and other loan interest rates at reasonable levels
C. Buying or selling stocks of publicly traded corporations in order to stabilize the stock market
D. Buying or selling bonds in the open market in order to stimulate the economy during recessions and prevent inflation


Answer: D

Economics

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