Module name: Msc Money and banking On March 15th, 2020, the Federal Reserve (the

Fed) responded to the threat of Coronavirus by cutting interest rates effectively to

zero, and a $700 billion round of quantitative easing (QE) - the Fed said it would

buy at least $500 billion in Treasury securities and $200 billion in government-

guaranteed mortgage-backed securities over the coming months. Critically

discuss

a) the monetary policy tools that the Feb may use to achieve the target low

interest rate, and

b) what QE is, why the Feb used it in the 2020 pandemic scenario, and how

to improve the effectiveness of QE based on the lessons learned from the

previous QE in the period of 2008-2015.