Question

In response to a severe recession, the Fed more than doubled the monetary base and pushed short-term interest rates to near zero during 2009-2010. What happened in 2011?

Answer 1

The Federal Reserve implemented expansionary monetary policy measures in 2009-2010 to combat the recession, but in 2011, they started to unwind these measures as the economy recovered.

Step-by-step explanation:

In response to the severe recession, the Federal Reserve implemented expansionary monetary policy measures in 2009-2010. This involved more than doubling the monetary base and pushing short-term interest rates to near-zero. These actions were aimed at stimulating the economy and preventing further decline. However, in 2011, the Federal Reserve began to unwind these measures as the economy started to recover. They gradually raised interest rates and reduced the monetary base to normalize monetary policy.