As a result of the Fed's actions during the 2008 financial crisis and banks' lending policies,
A)the M2 money multiplier has fallen from about 9 to about 4.
B)the M2 money multiplier more than doubled.
C)the monetary base decreased by 50 percent.
D)the ratio of currency to M2 deposits more than doubled.
E)the reserve requirement ratio increased.

Question

Quizplus · Accepted Answer

The Fed's actions during the 2008 financial crisis, such as implementing quantitative easing and lowering interest rates, led to a decrease in the M2 money multiplier. Additionally, banks became more cautious with lending, further contributing to the decrease in the money multiplier. The M2 money multiplier fell from about 9 to about 4 as a result.

As a Result of the Fed's Actions During the 2008