In 1998, in Order to Avoid Contagion, the Fed

question 66

Multiple Choice

In 1998, in order to avoid contagion, the Fed

• A)expanded the deposit insurance system.
• B)made substantial loans to three of the top ten U.S. banks.
• C)brought together the creditors of Long-Term Capital Management.
• D)raised interest rates.

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Definitions:

Long-Term Effects

The impacts or results of a policy, action, or event that manifest or become apparent over a lengthy period.

Pollution

The introduction of contaminants into the natural environment that cause adverse change and harm to ecosystems and human health.

Negative Externality

A cost experienced by a third party who did not choose to incur that cost, often related to environmental, social, or health issues.

Uncompensated Cost

Costs that occur when an action has effects, positive or negative, on third parties without those parties being compensated.