Question 29904 • * HSA 26-27 Economics
The Fed used monetary policy to support banks and the economy during the crisis. It bought securities, which added money to the banking system, and lowered interest rates to make borrowing more affordable and encourage credit. Buying securities is an example of open market operations, so the statement that the Fed used open market operations to stimulate growth is also correct. Fiscal policy is handled by the government, not the Fed, and the Fed did not cap how much cash individuals could withdraw.
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