Question

"Economy Contracting, Experts Report"

Answer 1

Increasing the money supply to spur economic growth is the monetary policy strategy of the Federal Reserve do these headlines  reflect.

Option C

Explanation:

The Federal Reserve (Fed) is responsible for many functions which all sum up to stabilizing the economy. Fed stabilizes the economy by increasing the supply of money when the economy is deteriorating which is done by lowering interest rates and by making sure consumers have more money.

When consumers earn more money they feel wealthier and this stimulates their purchasing power positively; they will spent more. More spending by consumers increases factory productions, sales, and the labour demand and in turn raises the demand of capital goods.