In Late 2007, the Fed Began a Series of Cuts

Multiple Choice

In late 2007, the Fed began a series of cuts in the federal funds rate.Because the core inflation rate was about two percent, the most likely reason for these interest rate cuts was

A) to raise the price of the dollar in the foreign exchange market.
B) to avoid a recession.
C) to encourage households to save more money.
D) to reduce the natural unemployment rate.
E) to increase the real interest rate.