From Before the Financial Crisis Began in September of 2007

question 115

Multiple Choice

From before the financial crisis began in September of 2007 to when the crisis was over at the end of 2009,the huge expansion in the Fed's balance sheet and the monetary base did not result in a large increase in monetary supply because

• A)most of it just flowed into holdings of excess reserve.
• B)the Fed also increased the required reserve ratio.
• C)the Fed also conducted open market sales.
• D)the discount loan decreased.

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Definitions:

Psychological Imbalance

A state where there is an unevenness in cognitive or emotional aspects within a person, possibly affecting decision-making and behavior.

Lack of Sophistication

Lack of sophistication in negotiations refers to a minimal level of skill, expertise, or complexity displayed by one or more parties.

Inadequate Skill

Lacking sufficient ability, expertise, or competency to perform a task or handle a situation effectively.

Philosophical Differences

Fundamental disagreements on basic principles, beliefs, or concepts between individuals or groups.