In late 2008, the United States was experiencing a crippling economic crisis that led to a recession. In response to the economic hardship, the Federal Reserve Board lowered interest rates to zero percent, lent money to various financial institutions and funds, and purchased mortgage bonds in bulk to stimulate the housing market. These actions are an example of ______.

Question

Quizplus · Accepted Answer

The actions described are examples of monetary policy, which involves the Federal Reserve Board controlling the money supply and interest rates to stabilize the economy. Fiscal policy, on the other hand, involves government spending and taxation to influence economic activity. Laissez-faire economics and supply-side economics are different economic theories that do not directly relate to the actions described.

In Late 2008, the United States Was Experiencing a Crippling