The Fed Took Action to Lower Interest Rates in Late

question 21

Multiple Choice

The Fed took action to lower interest rates in late 2007 and 2008 due to

• A)an unprecedented financial crisis that started in the housing market and spread to the broader economy.
• B)escalating inflation.
• C)a burgeoning government defidit.
• D)None of the above; the Fed increased interest rates through 2008.

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Definitions:

Need Theories

Theories in psychology that suggest human actions are motivated by the desire to fulfill basic needs such as safety, belonging, and self-esteem.

Expectancy Theories

Psychological theories that explain motivation in terms of individuals' expectations about their ability to perform tasks and receive desired rewards.

Goal-Setting Theories

Theories that describe how setting goals directs, motivates, and sustains human behavior to achieve those goals.

Equity Theories

Psychological theories focused on understanding how individuals perceive fairness in distribution of resources and rewards in relation to the contributions they have made.