During the 2007-2009 Financial Crisis, Some of the Very Largest

question 26

Multiple Choice

During the 2007-2009 financial crisis, some of the very largest financial institutions were deemed as being "too big to fail" because their failure would cause cascading negative repercussions throughout the U.S. and many foreign economies. As a result, the Federal Reserve

• A) moved to reduce liquidity in the monetary system and increased its target federal funds rate.
• B) worked with the U.S. Treasury to help facilitate the merging of financially weak institutions with institutions that were financially stronger.
• C) increased reserve requirements
• D) sold bond through open market operations

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