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

question 157

Multiple Choice

In response to the recession of 2008-2009, the Fed doubled its asset holdings from $925 billion at mid-year 2008 to more than $2 trillion by mid-year 2009. This policy

• A) reduced the reserves available to banks, leading to a larger money supply.
• B) reduced the reserves available to banks, causing the money supply to decline.
• C) increased the reserves available to banks, leading to a larger money supply.
• D) increased the reserves available to banks, causing the money supply to decline.

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Definitions:

Leverage

A measure of how far the values of the independent variables are from their mean values.

Regression Results

The outcomes of regression analysis, including the estimated relationships between variables and measures of these relationships' strength and significance.

Multicollinearity

The term used to describe the correlation among the independent variables.

Independent Variables

Variables in an experiment or model that are manipulated or changed to observe their effect on dependent variables.