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.
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. An anti-inflationary policy would involve raising interest rates. Explain and illustrate using bank balance sheets how this is accomplished by the Fed selling government securities to the banking system.