Which of These Was NOT a Response by the Government

question 85

Multiple Choice

Which of these was NOT a response by the government to mitigate the effects of the financial crisis?

• A) It made large loans to the U.S. automobile industry.
• B) It lent over $100 billion to Lehman Brothers to keep it from bankruptcy.
• C) It engaged in quantitative easing programs to remove risky assets from bank balance sheets.
• D) It passed a very large stimulus package to boost aggregate demand.

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Definitions:

Price-Fixing Agreement

An arrangement between competitors to set prices at a certain level, rather than allowing them to be determined by natural market forces, often considered illegal.

Per Se Violation

An act that is considered illegal in itself, without needing to prove harm or malicious intent, usually in antitrust law.

Foreign Firm

A business entity that is incorporated or based in a country other than where it is conducting business.

Monopoly Power

The exclusive control by one company over an entire industry or sector, allowing it to manipulate market prices and conditions.