During the 2007-2008 recession,the Fed's balance sheet:
A) consisted mostly of safe Treasury securities.
B) was split with 25% in risky assets and 75% in safe assets.
C) was split almost 50-50 between risky assets and safe assets.
D) consisted primarily of risky assets bought from troubled banks.

Question

Quizplus · Accepted Answer

During the 2007-2008 recession, the Fed's balance sheet was split almost 50-50 between risky assets and safe assets. The Fed had acquired a significant amount of mortgage-backed securities from troubled banks, which were considered risky assets, and also held a large amount of Treasury securities, which were considered safe assets. This balance sheet composition reflected the Fed's efforts to stabilize the financial system and support economic growth during the recession.

During the 2007-2008 Recession,the Fed's Balance Sheet