Unconventional Monetary Policy Tools Used by the Federal Reserve

Unconventional Monetary Policy Tools Used by the Federal Reserve

how the United States expanded its money supply primarily through unconventional monetary policy tools like quantitative easing, where the Federal Reserve bought specific bonds and credited the seller accounts. This increased the recorded quantity of money, even though physical dollars were not printed. As the crisis neared its end, the Federal Reserve adopted a contractionary monetary policy, stopping bond purchases and preparing to sell its holdings to remove the recorded dollars.

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