Now, write a paragraph explaining how the Fed responded to the financial crisis that began in 2008. Be sure to include how the Fed protected banks and why this was so important.

The federal government helped banks by protecting them from losses. They paid back some of their debts and gave them money to get them out of issues, which basically means that the tax payers saved the banks. It was done to prevent an even bigger economic collapse and people from losing all the money that was in the banks.

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sohail09753 sohail09753 · Answer 2 · 2022-01-18T08:27:16+01:00

Beginning in late 2007, the Fed began using the principal tool of traditional monetary policy, interest rate decreases, to combat increasing unemployment.

Responses to the financial crisis

The principal governing organization responsible for averting recessions is the Federal Reserve Board, which is America's central bank. It's also one of the several organizations in charge of overseeing banks and ensuring the financial system's stability. As a result, beginning in 2008 and lasting for several years afterward, the Fed was tasked with dealing with the intertwined financial and real-economy crises. The Fed has used a varied variety of instruments in its fight against the crisis, including classic monetary policy tactics as well as a variety of unconventional ones. It has received enormous political scrutiny and has been in the public glare like never before.

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