What major legislative act was enacted to help stabilize money markets in 2008?

The Emergency Economic Stabilization Act was enacted in 2008 as a direct response to the financial crisis that threatened to destabilize the entire economy. This legislation was pivotal in providing the U.S. government with the authority to purchase toxic assets and inject capital into financial institutions, effectively aiming to stabilize the banking sector and restore confidence in the overall financial system.

One of the key components included the establishment of the Troubled Asset Relief Program (TARP), which allowed the Treasury to buy or insure up to $700 billion in troubled assets. This action was designed to address the liquidity issues faced by banks, thereby restoring the normal functioning of the money markets.

The other options, while related to the financial system, do not specifically focus on the measures taken during the immediate 2008 crisis to stabilize money markets. The Emergency Economic Recovery Act pertains to policies before the financial meltdown, the Financial Reform Act refers to later regulatory reforms, and the Federal Reserve Act is a foundational piece of legislation addressing the Federal Reserve System but not specific to the 2008 crisis.