As a Result of the Global Financial Crisis in 2008,_____

question 29

Multiple Choice

As a result of the global financial crisis in 2008,_____.

• A)U.S.interest rates fell and the cost of servicing U.S.debt decreased
• B)U.S.citizens increased their purchase of foreign securities
• C)U.S.chronic deficits increased and debt service costs overwhelmed the budget
• D)debt issued by U.S.government entities was judged to be the safest in the world
• E)there was downgrading of the nation's credit risk by the chief credit-rating agency in 2011

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Definitions:

Open-Market Operations

The buying and selling of government securities by a central bank to control the money supply and interest rates.

Federal Reserve

The primary banking authority in the United States, tasked with overseeing monetary policy, managing bank regulation, and maintaining financial system stability.

Money Multiplier

The amount of money the banking system generates with each dollar of reserves.

Reserve Ratio

The fraction of deposits that banks hold as reserves.