Which of the Following Statements Is Most Accurate About the Fed's

Multiple Choice

Which of the following statements is most accurate about the Fed's use of the federal funds rate target since the financial crisis of 2007-2009?

A) It stimulated quick recovery from the Great Recession, and the target is now at precrisis levels.
B) The target has become significantly more important as a tool for signaling policy changes.
C) The Fed effectively lost the ability to use the target for contractionary monetary policy, as the actual federal funds rate fell to nearly zero.
D) The Fed effectively lost the ability to use the target for expansionary monetary policy, as the actual federal funds rate fell to nearly zero.