Author Question: The Federal Reserve responded to the 2008 financial crisis in several ways. Which of the following ... (Read 87 times)

leo leo · **on:** Jun 29, 2018

The Federal Reserve responded to the 2008 financial crisis in several ways. Which of the following is one of the ways the Fed responded?

A) The Fed helped Citibank to acquire General Motors and Chrysler.
B) The Fed lent investment banks Treasury securities in exchange for mortgage-backed securities.
C) The Fed lowered the required reserve ratio on demand deposit accounts in order to increase the amount of bank reserves.
D) The Fed banned investment banks from obtaining discount loans.

Question 2

According to the quantity theory of money, the inflation rate equals

A) real output minus the money supply.
B) the growth rate of the money supply minus the growth rate of real output.
C) the growth rate of real output minus the growth rate of the money supply.
D) the money supply minus real output.