In the early stages of the 2008 economic contraction, the Federal Reserve (central bank) responded with with aggressive easing of monetary policy. However, the economy continued to

contract in spite of the policy.

1. Fully explain the process of money creation by the Federal Reserve and how it works via the fractional reserve banking system.
2. Explain how the economy's money supply can remain rather unchanged in spite of large increases in the monetary base
3. Are there other tools the Fed can use in these situations to stimulate the economy and how were they used in 2008-2010?