Question

analyze fiscal policy responses to the unprecedented slowdown of the U.S. economy due to the coronavirus in March and April 2020

Answer 1

The coronavirus crisis in the United States and the related business shutdowns, event elimination, and work-from-home policies has activated a deep economic drop off of undetermined duration. The FED has worked with effective formation of actions to restric the economic loss from the pandemic, as well as up to $2.3 trillion loan amount to help households sectors, employers, financial institutions, and state and native governments.

Following are the steps which takes by the FED:-

i) The Fed has reduce its goal for the federal funds rate,

ii) The Fed has provided onward guidance on the future path of its main interest rate.

iii) The Fed has resumed buying large amounts of securities, a main device used during the Great Recession, when the Fed purchased trillions of long-term securities.

iv) The FED had provided easy loan facilities for everyone.

v) The Fed has restarted the money market mutual fund liquidity facility to boost the economy.

vi) The Fed has largely enlarged the opportunity of its bring back agreement (repo) functions to funnel cash to money markets and is now basically offering an immense amount of money.

vii) The FED has motivated banks to lend.

viii) The Fed is motivating banks—both the bigger banks and community banks.

ix) The FED is assisting corporations and small businesses

x)The FED is granting loans to small- and mid-sized businesses.