Which of the following was true of the actions of the Federal Reserve in response to the recession of 2008?
A) The Fed shifted toward a highly restrictive monetary policy in 2008, which was a major cause of the recession.
B) The Fed continued to focus only on price stability and therefore it expanded the money supply at a slow and steady rate throughout the recession.
C) The Fed introduced several new procedures for the conduct of monetary policy and it increased the monetary base rapidly as the recession worsened.
D) The Fed continued to purchase and sell only U.S. Treasury bonds when conducting open market operations to control the money supply.

Question

Quizplus · Accepted Answer

The Federal Reserve took several actions in response to the recession of 2008, including introducing new procedures for the conduct of monetary policy and increasing the monetary base rapidly. The Fed also engaged in unconventional monetary policy, such as purchasing mortgage-backed securities, in an effort to stimulate the economy. These actions were aimed at stabilizing financial markets and promoting economic growth, rather than solely focusing on price stability.

Which of the Following Was True of the Actions of the Federal