The Financial Crisis of 2008 Resulted in Extreme Policy Measures

Multiple Choice

The financial crisis of 2008 resulted in extreme policy measures by the Federal Reserve. Which of the following is the BEST characterization of its policy?

A) It was a complete reversion to the idea that eventually the economy is self-correcting and the best policy is to wait it out.
B) It was a massive injection of liquidity to banks and major purchases of U.S. government securities, which resulted in a near-zero federal funds rate.
C) It was a moderate approach that limited monetary growth to the rate of growth of real GDP.
D) It was based on a realization that the Federal Reserve was ineffective in the face of such a crisis.