Question

During the 2007 - 2009 financial crisis, what actions did the Fed take to limit the scope of the crisis?

A. The Fed set up the Term Auction Facility to provide further liquidity to banks.
B. The Fed lowered the spread on the discount rate to 50 basis points, and then to 25.
c. The Fed purchased assets of Bear Stearns to facilitate the purchase of Bear Stearns by J.P. Morgan.
d. all of the above.

Answer 1

The correct answer is D. all of the above. The Federal Reserve took several actions to limit the scope of the 2007-2009 financial crisis, including setting up the Term Auction Facility, lowering the discount rate spread, and purchasing assets of Bear Stearns.

Step-by-step explanation:

The Federal Reserve took several actions to limit the scope of the 2007-2009 financial crisis. These actions included:

1. The Fed set up the Term Auction Facility to provide further liquidity to banks.
2. The Fed lowered the spread on the discount rate to 50 basis points, and then to 25.
3. The Fed purchased assets of Bear Stearns to facilitate the purchase of Bear Stearns by J.P. Morgan.