The Board of Governors of the Federal Reserve Holds a Meeting

Multiple Choice

The Board of Governors of the Federal Reserve holds a meeting to discuss its concern over the decreasing gross domestic product of the country. All members agree that the situation can be brought under control and the economy can be stimulated if they use the discount rate as a tool. In this scenario, the Fed is most likely to:

A) reduce the discount rate.
B) maintain the existing discount rate.
C) increase the discount rate.
D) slash the discount rate altogether.