Why Did the Monetary Base Increase Rapidly During the Economic

question 58

Multiple Choice

Why did the monetary base increase rapidly during the economic crisis of 2008?

• A) The Fed sold financial assets and extended fewer loans.
• B) The Fed increased both its purchase of assets and quantity of loans extended.
• C) The Fed increased its purchases of assets, but offset this with an increase in the reserve requirement.
• D) The Fed sold financial assets, but offset this with a reduction in the reserve requirement.

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Definitions:

Vector

An agent, such as an insect or rodent, that carries and transmits a disease-causing organism from one host to another.

Disease Transmission

The mechanism by which a disease spreads from one individual to another, either through direct contact, vectors, or environmental factors.

Parasitic Organism

An organism that lives on or within a host species, deriving nutrients at the host's expense, often causing harm but occasionally living in an otherwise harmless relationship.

Endocrine Disruptor

A chemical substance that interferes with the endocrine (hormone) system, potentially causing cancerous tumors, birth defects, and other developmental disorders.