The​ Fed’s bond holdings increased from​ $900 billion in 2009 to​ $4.5 Trillion in 2016. The purpose of the​ Fed’s decision to increase its bond holdings from 2009 to 2016 was to     A. to decrease the reserves in the banking system thus engaging in so called​ “contractionary monetary​ policy” needed to contract the level of inflation   B. contract the money supply to counteract the high rates of unemployment then existing in the United States   C. increase the reserves in the banking system to increase bank lending and aggregate demand.   D. engage in expansionary fiscal policy

Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter21: The Monetary System
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The​ Fed’s bond holdings increased from​ $900 billion in 2009 to​ $4.5 Trillion in 2016. The purpose of the​ Fed’s decision to increase its bond holdings from 2009 to 2016 was to  
 
A.
to decrease the reserves in the banking system thus engaging in so called​ “contractionary monetary​ policy” needed to contract the level of inflation
 
B.
contract the money supply to counteract the high rates of unemployment then existing in the United States
 
C.
increase the reserves in the banking system to increase bank lending and aggregate demand.
 
D.
engage in expansionary fiscal policy
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