During the 2007-2009 recession, the Federal Reserve's balance sheet
A) consisted mostly of safe Treasury securities.
B) was split, with 25% in risky assets and 75% in safe assets.
C) was split almost 50-50 between risky assets and safe assets.
D) consisted primarily of risky assets bought from troubled banks.

Question

Quizplus · Accepted Answer

During the 2007-2009 recession, the Federal Reserve's balance sheet was split almost 50-50 between risky assets (such as mortgage-backed securities) and safe assets (such as Treasury securities). This was due to the Fed's decision to engage in unconventional monetary policy, including purchasing large quantities of risky assets to stimulate the economy.

During the 2007-2009 Recession, the Federal Reserve's Balance Sheet