In a speech to the Fed conference in Jackson Hole, Wyoming, given eight months after the Fed had raised its target for the federal funds rate for the first time since 2006, then Fed Chair Janet Yellen observed that the 2007-2009 financial crisis had revealed the Fed's "inability to control the federal funds rate once reserves were no longer relatively scarce." She went on to state: "To address the challenges posed by the financial crisis .. . the Federal Reserve significantly expanded its monetary policy toolkit. . . Our current toolkit proved effective last December. In an environment of superabundant reserves, the FOMC raised the effective federal funds rate." What does Yellen mean by "reserves were no longer relatively scarce"? Before the financial crisis, banks chose to hold relatively low levels of excess reserves, but since the 2007-2009 financial crisis, banks are choosing to hold significantly more excess reserves. Briefly explain why, with the monetary policy tools it had used prior to the financial crisis, the Fed could not control the federal funds rate. A. Since excess reserves moved to near zero, open market operations by the Fed had very little impact on the federal funds rate. O B. The Fed was not able to conduct open market operations before the 2007-2009 financial crisis and instead had to rely on discount lending to influence the federal funds rate. O C. After excess reserves became abundant, changes in reserves due to open market operations led to almost no movement in the federal funds rate. O D. After excess reserves became abundant, changes in reserves due to open market operations led to uncontrollably large movements in the federal funds rate