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.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter21: Financial Markets, Saving, And Investment

Section: Chapter Questions

Problem 10P

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