In early March 2020, when the Fed cut the target for the federal funds rate by...

Transcribed Image Text:

In early March 2020, when the Fed cut the target for the federal funds rate by 0.5 percentage point, an article on bloomberg.com stated that the Fed took the move to "protect the longest-ever economic expansion from the spreading coronavirus." Source: Sophie Caronello and Craig Torres, "Fed Cuts Interest Rates by Half Point in Emergency Move," bloomberg.com, March 3, 2020. Was the Fed successful in keeping the U.S. economy out of a recession? A. Yes it was; expansionary monetary policy such as cutting the federal funds rate keeps an economy out of recession. B. Yes it was; the Fed's action in March 2020 were in time to keep the US out of recession. C. No it was not; the US was already in recession in 2019 even before the Covid-19 pandemic began. D. No it was not; the Fed's action in March 2020 were too late to keep the US out of recession. What was a difficulty the Fed faced in keeping the economic expansion that begin in June 2009 going. A. The US was already in recession in 2019 even before the Covid-19 pandemic began, even though the data had not yet shown this. B. No monetary policy action could have prevented the recession given the mandatary closure of most businesses worldwide. C. The Fed did not understand that an economic recession could arise from a health-related pandemic. D. The Fed was limited to cutting the federal funds rate by at most 0.5 percentage points, so it could not do enough to avoid the Covid-related recession. In early March 2020, when the Fed cut the target for the federal funds rate by 0.5 percentage point, an article on bloomberg.com stated that the Fed took the move to "protect the longest-ever economic expansion from the spreading coronavirus." Source: Sophie Caronello and Craig Torres, "Fed Cuts Interest Rates by Half Point in Emergency Move," bloomberg.com, March 3, 2020. Was the Fed successful in keeping the U.S. economy out of a recession? A. Yes it was; expansionary monetary policy such as cutting the federal funds rate keeps an economy out of recession. B. Yes it was; the Fed's action in March 2020 were in time to keep the US out of recession. C. No it was not; the US was already in recession in 2019 even before the Covid-19 pandemic began. D. No it was not; the Fed's action in March 2020 were too late to keep the US out of recession. What was a difficulty the Fed faced in keeping the economic expansion that begin in June 2009 going. A. The US was already in recession in 2019 even before the Covid-19 pandemic began, even though the data had not yet shown this. B. No monetary policy action could have prevented the recession given the mandatary closure of most businesses worldwide. C. The Fed did not understand that an economic recession could arise from a health-related pandemic. D. The Fed was limited to cutting the federal funds rate by at most 0.5 percentage points, so it could not do enough to avoid the Covid-related recession.

Answer rating: 100% (QA)

The detailed answer for the above question is provided below A Ye... View the full answer