The federal reserve bank would likely increase the money supply in order to spur economic activity and address high levels of unemployment in the economy.
The Federal Reserve has a number of tools at its disposal to influence the economy, and one of the most important is the money supply. By increasing the money supply, the Federal Reserve can spur economic activity and help to reduce unemployment. This is because when there is more money available in the economy, businesses can expand and hire more workers. This, in turn, can lead to increased consumer spending, which can further boost economic activity.
The Federal Reserve has used this approach in the past to great effect, and it is likely that it will continue to do so in the future. This is because it is a relatively simple and straightforward way to help boost the economy and create jobs. In addition, it is one of the most effective tools the Federal Reserve has to influence the economy.
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