Many Economists Argue That the Fed Contributed to the Housing

question 23

Multiple Choice

Many economists argue that the Fed contributed to the housing bubble by:

• A)passing laws that allowed financial institutions to create credit default swaps.
• B)paying interest on bank reserves.
• C)keeping the Fed funds rate lower than what the Taylor rule predicts.
• D)buying mortgage-backed securities for foreclosed homes.

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Definitions:

Conformity

The act of matching attitudes, beliefs, and behaviors to group norms or expectations, often to fit in or be accepted by others.

Kelley

Often associated with George A. Kelley's cognitive theory of personality which emphasizes personal construct psychology, focusing on how people's unique perceptual constructs shape their reality.

Compliance

The act of conforming to a request or command, often used in social psychology to discuss conformity and obedience.

Conformity

The act of matching attitudes, beliefs, and behaviors to group norms, politics, or being similar to others.