The Tools That Were Intended to Allocate Funds and Spread

question 99

Multiple Choice

The tools that were intended to allocate funds and spread risk more efficiently in the housing market made it:

• A) easier to keep everyone fully informed.
• B) more difficult to keep everyone fully informed.
• C) easier to understand the true risk involved with these assets.
• D) more difficult to justify buying mortgage-backed securities over other low-risk assets.

---

Definitions:

U.S. Monetary Policy

The process by which the Federal Reserve controls the supply of money in the U.S. economy to achieve stable prices, maximum employment, and moderate long-term interest rates.

U.S. Department of the Treasury

The federal department responsible for managing government revenue, producing currency, and implementing fiscal policies.

Pie Charts

Graphical representations used to illustrate the proportions of different components within a total.

Time-Series Graphs

Charts that display data points at successive intervals of time, showing trends or patterns over a period.