In 2008, the Trouble Asset Relief Program (TARP)

question 7

Multiple Choice

In 2008, the Trouble Asset Relief Program (TARP)

• A) was used to create the government-sponsored enterprises, Freddie Mac and Fannie Mae.
• B) provided bailouts to homeowners who were upside down in their home loans.
• C) was the first time the government intervened in a business failure in American history.
• D) provided a bailout to banks, automobile companies, and the AIG insurance company.
• E) helped small businesses expand during the economic downturn.

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Definitions:

Shortage

refers to a situation where the demand for a product or service exceeds the supply available at a specific price.

Surplus

The condition where quantity supplied exceeds quantity demanded, often leading to a decrease in prices.

Price Ceiling

A legally established maximum price that can be charged for a product or service, often set by government to prevent prices from reaching too high levels.

Price Floor

A government-set minimum price at which a product can be sold, aimed to prevent the price from falling too low.