Asked by Vukosi Ellon on May 07, 2024
Verified
In October 2008,in attempt to avoid high inflationary tendencies which could damage the recovery from the Great Recession the Federal Reserve
A) started paying interest to the banks on reserves held in the Federal Reserve Banks.
B) increased the reserve requirements on all banks.
C) sold a large quantity of government securities on the open market.
D) increased the interest rates charged to the banks when borrowing from the FED.
Inflationary Tendencies
The general tendencies or trends towards increasing prices and diminishing purchasing power over time within an economy.
Federal Reserve
The central banking system of the United States, responsible for monetary policy, regulation of financial institutions, and ensuring stability of the financial system.
Recovery
Phase of business cycle during which real GDP increases from trough level to level of previous peak.
- Gain insight into how policies implemented by the Federal Reserve influence inflation and economic recessions.
Verified Answer
Learning Objectives
- Gain insight into how policies implemented by the Federal Reserve influence inflation and economic recessions.
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