Why Did Greenspan Receive Criticism During the 2008 Financial Crisis

question 125

Multiple Choice

Why did Greenspan receive criticism during the 2008 financial crisis and the recession?

• A) Critics argue that Greenspan should have tried to control the rise in AD by reducing the money supply.
• B) Critics argue that Greenspan should have put a cap on home values.
• C) Critics argue that Greenspan left the Fed without any direction as to monetary policy.
• D) Critics argue that Greenspan should have increased the money supply to lower house price inflation.

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Definitions:

Collateral Contracts

Collateral contracts are supplementary agreements made in addition to a primary contract, which impose additional obligations or conditions related to the primary contract's terms.

Guarantor

An individual or entity that agrees to be responsible for another's debt or contractual obligations if the original party fails to meet their terms.

Principal Debtor

The main party obligated to repay a loan or debt.

Parol Evidence Rule

A legal principle that prevents parties from using oral or extrinsic evidence to contradict, vary, or add to the terms of a written contract.