What does it mean when economists say that the Fed has attempted to "normalize" monetary policy after the Great Recession?
A) The Fed has tried to use monetary policy to restore the unemployment rate to its normal full employment rate of around 5 percent.
B) The Fed has tried to use monetary policy to raise excess reserves back up to normal prerecession levels.
C) The Fed has tried to make all of the monetary policy actions used during the ﬁnancial crisis a normal part of the monetary policy tool kit.
D) The Fed has tried to use monetary policy to bring interest rates back to their historically normal levels.

Question

Quizplus · Accepted Answer

"Normalization" of monetary policy after the Great Recession refers to the Fed's attempt to bring interest rates back to their historically normal levels. During the Great Recession, the Fed lowered interest rates to near-zero levels to encourage borrowing and stimulate the economy. With the economy now recovering, the Fed has been gradually raising interest rates to more normal levels to prevent inflation and curb excessive borrowing.

What Does It Mean When Economists Say That the Fed