In a letter to a member of Congress, Fed Chairman Ben Bernanke made the following statement:

The monetary accommodation provided by the Federal Reserve has substantially helped the U.S. economy by easing financial conditions.

. . . The easing in financial conditions has promoted economic activity through a variety of channels, including reducing the cost of capital, boosting the aggregate wealth of U.S. households, and improving the competitiveness of U.S. businesses in the global marketplace.

a. What does Bernanke mean by “monetary accommodation”?

b. What does Bernanke mean by “easing financial conditions”?

c. Briefly explain how easing financial conditions promoted economic activity through each of the three “channels” that Bernanke mentions.