Between September 2007 and March 2008 there was a substantial reduction in the demand for housing.What action did the Fed take in response to the reduction in the demand for housing?
A)The Federal Reserve decreased the required reserve rate.
B)The Fed conducted open market sales of Treasury securities.
C)The Federal Reserve cut the federal funds rate seven times.
D)The Federal Reserve raised the discount rate by 3 percentage points.

Question

Quizplus · Accepted Answer

The Federal Reserve cut the federal funds rate seven times in response to the reduction in the demand for housing between September 2007 and March 2008. This was done in an attempt to stimulate economic activity by making it easier and cheaper for banks to lend money. Lowering the federal funds rate also reduces the cost of borrowing for consumers and businesses, which can increase demand for goods and services.

Between September 2007 and March 2008 There Was a Substantial