Congress has embarked on another round of expansionary fiscal policy to boost employment and get reelected. As chair of the central bank how would you reduce the "crowding-out" effect and what macroeconomic problem might your policy exacerbate?
(A)Increase the reserve ratio risking the devaluation of the dollar (B)Sell government securities risking inflation (C)Buy government securities risking a recessionary gap (D)Lower the discount rate risking inflation
D