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:

Werther Syndrome

A phenomenon where high-profile suicides lead to an increase in suicide rates among the populace, influenced by media coverage and social suggestion.

Choreomania

A phenomenon of mass dancing or outbreaks of group dancing that occurred in Europe, particularly during the Middle Ages.

Mass Hysteria

A phenomenon where collective illusion of a threat spreads among a population, leading to fear and irrational behavior.

Tulipmania

A period in the Dutch Golden Age where contract prices for tulip bulbs reached extraordinarily high levels and then dramatically collapsed.