Before the fiNancial Crisis of 2008, Restrictive Monetary Policy by the Fed

question 40

Multiple Choice

Before the financial crisis of 2008, restrictive monetary policy by the Fed involved

• A) raising the target federal funds rate and using an open-market sale of bonds to adjust bank reserves and thereby raise the federal funds rate to hit its target.
• B) raising the target federal funds rate and using an open-market purchase of bonds to adjust bank reserves and thereby raise the federal funds rate to hit its target.
• C) reducing the target federal funds rate and using an open-market sale of bonds to adjust bank reserves and thereby lower the federal funds rate to hit its target.
• D) reducing the target federal funds rate and using an open-market purchase of bonds to adjust bank reserves and thereby lower the federal funds rate to hit its target.

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Definitions:

Cost-Benefit Analysis

A systematic process of comparing the costs and benefits of a decision, project, or action to determine its feasibility or profitability.

Recycling Intervention

Programs or actions designed to increase the rate of recycling among communities or organizations by changing attitudes or behaviors.

Resource-Destructive Harvesting

Practices that excessively exploit natural resources, leading to their rapid depletion and ecological damage.

Community-Oriented Harvesting

Refers to a practice or initiative aimed at gathering food or other resources in a way that benefits and involves the local community, promoting sustainability and cooperation.