Which of the Following Was a Lesson from the 2007-2009

question 4

Multiple Choice

Which of the following was a lesson from the 2007-2009 financial crisis?

• A)The financial system needed more leverage in order to operate.
• B)The job of stabilizing the economy should be assigned exclusively to monetary policy.
• C)Monetary policy is finished once the Fed reduces the federal funds rate to zero.
• D)The business cycle still exists.

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Definitions:

Quoted Price

The stated price at which an asset or service can be bought or sold in the market.

Semi-Annual Interest

Interest on a loan or investment calculated twice a year.

Inflation

The rate at which the general level of prices for goods and services rises, eroding purchasing power.

Semi-Annual Coupon

A bond or fixed-income security that pays interest to its holder twice a year.