The economy has been sluggish in recent months with slow economic growth. Explain the policies that the Federal Reserve could use to improve the economy.(1 point) The Federal Reserve stops purchasing treasuries and securities, and then issues new reverse repurchase agreements. The short-term profits and decrease in the money supply cause a decrease in interest rates and increased lending.

The Federal Reserve sells treasuries back to banks and issues new reverse repurchase agreements. The decrease in the money supply increases interest rates, which increases lending.

The Federal Reserve purchases treasuries and securities and also issues new repurchase agreements. The increase in the money supply and decrease in interest rates result in more lending and risk.

The Federal Reserve purchases treasuries and securities, and also issues new repurchase agreements. The increase in the money supply increases interest rates and inflation, which spurs economic growth.