Beginning in 2008, the Fed was allowed to
A) lend directly to consumers.
B) alter tax rates.
C) pay interest on excess reserves deposited at Fed banks.
D) require commercial banks to loan a certain percentage of their excess reserves.

Question

Quizplus · Accepted Answer

Beginning in 2008, the Fed was allowed to pay interest on excess reserves deposited at Fed banks. This was done as a means of controlling inflation by discouraging banks from lending out excess reserves and potentially driving up prices.

Beginning in 2008, the Fed Was Allowed to