According to current monetary policy, which of the following decisions would best help end a recession in the United States?

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The decision to have the Federal Reserve decrease the interest rate and buy government securities is aligned with the aim of stimulating economic activity during a recession. Lowering interest rates reduces the cost of borrowing, making it more attractive for consumers and businesses to take loans for spending and investment. This increased spending can help to boost demand for goods and services, encouraging businesses to ramp up production and hire more workers, ultimately helping to revitalize the economy.

Additionally, purchasing government securities injects liquidity into the banking system. When the Federal Reserve buys these securities, it increases the reserves of the banks, providing them with more capital to extend loans. This combination of lower interest rates and increased reserves encourages lending, which can help spur economic growth during times of recession.

The other options typically act to tighten monetary policy rather than easing it, therefore not effectively addressing the problem of a recession. Increasing interest rates and increasing reserve requirements would lead to reduced borrowing and spending, which could prolong or deepen the economic downturn.

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