Question

If the United States falls into a recession, which action would the Federal Reserve take to encourage employment? A. Buy government securities B. Increase reserve requirements C. Raise federal funds and prime rates D. Sell government securities.

Answer 1

If the United States falls into a recession, the action that the Federal Reserve would take to encourage employment is A. buy government securities. 
When they do that they pump money into the economy, which lowers interest rates, which in turn increases aggregate demand. 

Answer 2

Answer: A  

Explanation:  if the United States falls into a recession the Federal Reserve would Buy government bonds to encourage employment. When the federal reserve will buy the bonds, this will release money into the economy which will be then be rolled out in the public through lower interest rates, people will now have money to spend and this will generate demand. The supply will also increase and hence in this way the employment be generated.