Final answer:
The claim that the Federal Reserve's total assets decreased between February 2008 and March 2009 is false. During that time, the Fed engaged in quantitative easing to stabilize the financial system, which increased its balance sheet significantly. By the end of 2021, Federal Reserve assets had further expanded to over $8 trillion due to ongoing economic support measures.
Step-by-step explanation:
The statement that the Federal Reserve's total assets decreased between February 2008 and March 2009 is false. During the financial crisis of 2007-2008, the Fed undertook a series of unconventional monetary policy actions, including significant asset purchases to provide liquidity and stabilize the financial system. These actions, commonly referred to as quantitative easing (QE), increased the Fed's balance sheet as it bought securities like government bonds and mortgage-backed securities.
In response to banks and households finding their assets worth less and a recession starting in 2007, the Federal Reserve likely lowered the reserve requirements to encourage lending and stimulate the economy. This was in line with other measures to combat high economic uncertainty and increased savings rates seen in March 2009 when consumption declined.
Fast forward to March 2020, under Jerome Powell's leadership, the Fed announced "QE4" in response to the pandemic, further bolstering their assets by $2 trillion in a few months. By the end of 2021, Federal Reserve assets exceeded $8 trillion, landing far above the levels seen in the earlier financial crisis. The Fed has since begun tapering these asset purchases, with intentions to accelerate through 2022.