Before the ﬁnancial crisis of 2008, if the Fed wanted to lower the Federal funds rate, it
A) increased the discount rate.
B) increased the reserve ratio.
C) bought bonds from banks and the public.
D) sold bonds to banks and the public.

Question

Quizplus · Accepted Answer

Before the financial crisis of 2008, if the Fed wanted to lower the Federal funds rate, it would buy bonds from banks and the public. This would increase the money supply in the economy, leading to a decrease in interest rates, including the Federal funds rate.

Before the ﬁNancial Crisis of 2008, If the Fed Wanted