During the Great Recession, which deepened after the financial crisis of 2008-9, the Federal Reserve employed an array of unconventional monetary policy actions in an attempt to halt the contraction and rejuvenate the economy.

a)Define conventional monetary policy and explain how the Fed typically managed the US macroeconomy from the mid 1980s until the mid 2000s.

b)Explain why conventional monetary policy ceased working after the financial crisis in 2008-9.

c)List three unconventional monetary policy actions taken by the Federal Reserve and explain how these actions promoted economic recovery.

d)Draw a yield curve and write the formula for the yield curve. Explain how the three unconventional policies that you described above influenced the terms in and shape of the yield curve.