Which of the Following Was True of the Actions of the Federal

question 117

Multiple Choice

Which of the following was true of the actions of the Federal Reserve in response to the recession of 2008?

• A) The Fed shifted toward a highly restrictive monetary policy in 2008, which was a major cause of the recession.
• B) The Fed continued to focus only on price stability and therefore it expanded the money supply at a slow and steady rate throughout the recession.
• C) The Fed introduced several new procedures for the conduct of monetary policy and substantially increased bank reserves as the recession worsened.
• D) The Fed continued to purchase and sell only U.S. Treasury bonds when conducting open market operations to control the money supply.

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Definitions:

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