The economy is in a severe recession. The government should end fiscal policy increase spending increase taxes end monetary policy.

increase spending

Explanation:

In order to try to rebound the economy the FED has three options:

Carry on an expansionary monetary policy which increases the money supply and decreases interest rates, which should increase aggregate demand. Increase government spending, which should increase total aggregate demand. Decrease taxes, which would increase the amount of disposable income held by consumers and businesses, which should also increase aggregate demand.

The problem is that nothing is free; an expansionary monetary policy increase the inflation rate, an increase in government spending and a decrease in taxes increases the government deficit and national debt (and the interests paid on them).