67. During the financial crisis of 2008, the Federal Reserve took extreme policy measures. Which of the following is the BEST characterization of its policy? a. It was a complete reversion to the idea that eventually the economy is self-correcting and the best policy is to wait it out. b. It was a massive injection of liquidity to banks and major purchases of U.S. government securities, which resulted in a near-zero federal funds rate. c. It was a moderate approach that limited monetary growth to the rate of growth of real GDP. d. It was based on a realization that the Federal Reserve was ineffective in the face of such a crisis.
67. During the financial crisis of 2008, the Federal Reserve took extreme policy measures. Which of the following is the BEST characterization of its policy? a. It was a complete reversion to the idea that eventually the economy is self-correcting and the best policy is to wait it out. b. It was a massive injection of liquidity to banks and major purchases of U.S. government securities, which resulted in a near-zero federal funds rate. c. It was a moderate approach that limited monetary growth to the rate of growth of real GDP. d. It was based on a realization that the Federal Reserve was ineffective in the face of such a crisis.
Chapter21: Financial Markets, Saving, And Investment
Section: Chapter Questions
Problem 10P
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67. During the financial crisis of 2008, the Federal Reserve took extreme policy measures. Which of the following is the BEST characterization of its policy?
a. It was a complete reversion to the idea that eventually the economy is self-correcting and the best policy is to wait it out. |
b. It was a massive injection of liquidity to banks and major purchases of U.S. government securities, which resulted in a near-zero federal funds rate. |
c. It was a moderate approach that limited monetary growth to the rate of growth of real |
d. It was based on a realization that the Federal Reserve was ineffective in the face of such a crisis. |
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