In response to the severe recession of 2008-2009, the Fed
A) expanded the monetary base and pushed short-term interest rates sharply higher.
B) reduced the size of the monetary base and pushed short-term interest rates sharply higher.
C) more than doubled the size of the monetary base and pushed short-term interest rates to near zero.
D) more than doubled the size of the monetary base and pushed short-term interest rates to a historic high.

Question

In response to the severe recession of 2008-2009, the Fed
A) expanded the monetary base and pushed  short-term interest rates sharply higher.
B) reduced the size of the monetary base and pushed short-term interest rates sharply higher.
C) more than doubled the size of the monetary base and pushed short-term interest rates  to near zero.
D) more than doubled the size of the monetary base and pushed short-term interest rates to a historic high.

Quizplus · Accepted Answer

In response to the severe recession of 2008-2009, the Fed more than doubled the size of the monetary base through a policy of quantitative easing and pushed short-term interest rates to near zero to stimulate economic growth and counter deflationary pressures.

In Response to the Severe Recession of 2008-2009, the Fed