From September 2007 to April 2008, the Fed Lowered the Federal

question 315

Multiple Choice

From September 2007 to April 2008, the Fed lowered the federal funds rate from 5.25 percent to 2 percent in a series of steps. The Fed's actions were largely in response to

• A) threats to the financial system from the mortgage default crisis.
• B) forecasts of higher inflation rates.
• C) Chinese refusal to allow their exchange rate to reflect market conditions.
• D) pressure from the president to offset contractionary effects of a tax increase.

---

Definitions:

Transform Faults

Boundaries between tectonic plates where the motion is predominantly horizontal, leading to earthquakes but not creating volcanoes.

Gulf of Mexico

A large ocean basin near the southeastern coast of North America, bounded by the United States, Mexico, and Cuba, known for its rich biodiversity and significant oil reserves.

Narrow Ocean

A relatively thin and elongated body of oceanic water situated between more substantial land masses.

Narrow Ocean

Refers specifically to the relatively thinner and smaller expanses of ocean, often found between landmasses.