Monetary Policy Pushed Interest Rates to Historically Low Levels During

Multiple Choice

Monetary policy pushed interest rates to historically low levels during 2002-2004, but was more restrictive during 2005-2006. Economic analysis indicates that this policy

A) helped to smooth the ups and downs of the business cycle during this era.
B) contributed to the boom and bust of the housing market, and thereby the instability of this era.
C) contributed to the housing bust of 2002-2004, but helped to restore stability to the housing market in 2006-2008.
D) helped to bring inflation under control during 2002-2004, and thereby established a foundation for a strong recovery during 2007-2010