What unusual measures did the Fed take in trying to reduce the risk premium during the Financial Crisis of 2007-2009?
A) buying mortgage-backed securities issued by Fannie Mae and Freddie Mac
B) reducing the federal funds rate multiple times
C) issuing its own securities
D) eliminating the discount rate on loans to member banks

Question

Quizplus · Accepted Answer

The Fed took the unusual measure of buying mortgage-backed securities issued by Fannie Mae and Freddie Mac to reduce the risk premium and stabilize the financial markets during the Financial Crisis of 2007-2009.

What Unusual Measures Did the Fed Take in Trying to Reduce