Which of the Following Was Not a Reason That the Federal

question 209

Multiple Choice

Which of the following was not a reason that the Federal Reserve took on additional risks associated with unconventional policy during the recession of 2007-2009?

• A)The large budget deficit constrained fiscal policy.
• B)The inflated price of Treasury bills made them too expensive to purchase in open market operations.
• C)Only the Federal Reserve acting as the central bank can serve as the lender of last resort.
• D)The Fed was able to act more quickly than Congress.

---

Definitions:

Elaboration

The addition of more detail, explanation, or information to a concept, idea, or proposal.

Automaticity

The ability to perform tasks without occupying the mind with the low-level details, achieved through repetition and practice.

Elaboration

The process of adding more information or detail to a concept, idea, or argument in order to enhance understanding or clarity.

Medusa

A jellyfish-like animal; a free-swimming, umbrella-shaped stage in the life cycle of certain cnidarians. Compare with polyp.