Looking at the Fed's actions during the 2008 financial crisis, we can see that the Fed
A) decrease the monetary base to reduce risky lending.
B) doubled the monetary base.
C) doubled the money multiplier.
D) caused banks to increase the reserve requirement ratio.
E) increased the monetary base by 10 percent.

Question

Quizplus · Accepted Answer

During the 2008 financial crisis, the Fed doubled the monetary base by engaging in large-scale asset purchases through its quantitative easing program. This was done in order to inject liquidity into the financial system and prevent a collapse of the banking system.

Looking at the Fed's Actions During the 2008 Financial Crisis