Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The federal reserve assumed that the high inflation was related to the sudden reopening of the US economy after the Covid shut down and the
The federal reserve assumed that the high inflation was related to the sudden reopening of the US economy after the Covid shut down and the term they used was transitory. During the Covid shut down, the Feds pumped $750 billion a month into the economy in what is called quantitative easing and this lead to easy credit as banks had more money to lend out. This led to the economy being able to function during the Covid shut down but may have been a factor in the current issues and the Federal Reserve has been tapering things off.
*Why was the Federal Reserve reluctant to suddenly end quantitative easing, even with the current high inflation?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started