How Did the Fed Contribute to the Recent Banking Crisis

question 89

Multiple Choice

How did the Fed contribute to the recent banking crisis?

• A)As the regulator of monetary policy,the Fed kept interest rates suppressed.
• B)As the regulator of monetary policy,the Fed ignored the warnings of Moody's and other bond rating agencies.
• C)The Fed required banks to create adjustable rate mortgages with interest rates significantly higher than those attached to fixed-rate mortgages.
• D)The Fed encouraged home ownership.

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Definitions:

Glucagon-like Peptide-1

A hormone that aids in regulating glucose levels in the blood by increasing insulin production.

Hypothalamus

A region of the brain responsible for producing hormones that control various bodily functions, including temperature regulation, hunger, moods, and the release of hormones from the pituitary gland.

Appetite

The innate craving to fulfill a physical necessity, particularly the need for nourishment.

Binge Eating Disorder

A serious eating disorder marked by recurrent episodes of eating large quantities of food (often very quickly and to the point of discomfort), a feeling of a loss of control during the binge, experiencing shame, distress or guilt afterwards, and not regularly using unhealthy compensatory measures (e.g., purging) to counter the binge eating.