Tracing the Cause of the Recent Banking Crisis,which of the Following

question 218

Multiple Choice

Tracing the cause of the recent banking crisis,which of the following organizations is not in the news as having been a contributor to the crisis?

• A)The Federal Reserve suppressed interest rates which made it easier for prospective home owners and others to get loans.
• B)Congress promoted questionable loans.
• C)Banks dealt in MBSs Mortgage Backed Securities)that were not as safe as assumed.
• D)Pension funds invested in risky investments.

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Definitions:

Natural Rate

The natural rate often refers to the natural rate of unemployment, which is the level of unemployment consistent with sustainable economic growth, not accelerated by inflation.

Unexpectedly High

A level or measure that exceeds what was anticipated or forecasted.

Natural Rate

The long-term rate of unemployment around which the unemployment rate fluctuates, or the rate of output expected when resources are fully employed.