1. Explain how the Federal Reserve'sconventionalmonetary policy tools involving open market operations and the discount rate were used in an attempt to counteract the Great Recession (2007-2009) and the Covid Recession (beginning March 2020).Use a balance sheet for the Federal Reserve and a consolidated balance sheet for the banking system as a whole to illustrate how the Fed's monetary policies affected bank reserves and explain why these policies were expected to help counteract a recession. Focus on the Fed making an open market purchase of govt bonds to inject new reserves into the banking system (so banks can expand lending and support aggregate demand growth to counter a recession).Use bank balance sheets to illustrate how this is done
2. When the Federal Reserve's conventional monetary policies proved ineffective in fully preventing the Great Recession, the Fed resorted tounconventionalmonetary policies.Describe at least three unconventional monetary policies undertaken by the Fed and explain the rationale behind each of them.
3. Explain (and illustrate using bank balance sheets) how an anti-inflationary policy would involve raising interest rates is accomplished by the Fed selling govt securities to the banking system