Why Did Some Criticize the Lobbyist-Backed Fannie Mae and Freddie

question 25

Multiple Choice

Why did some criticize the lobbyist-backed Fannie Mae and Freddie Mac bailouts?

• A)The bailout prevented each from keeping profits private.
• B)The bailout allowed only Fannie Mae to keep profits private but pass on the risk to taxpayers.
• C)The bailout allowed each to keep profits private but pass on the risk to taxpayers.
• D)The bailout prevented each from keeping profits private, but some risk was still passed on to taxpayers.

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Definitions:

Federal Transfer Payments

Government payments transferred to individuals or states, often for assistance, without requiring direct services in return.

Tax Receipts

The revenue collected by the government through various forms of taxes.

Borrowing

The act of obtaining resources (usually money) from another party with the promise of repayment under defined terms, often involving interest.

Marginal Tax Rate

The rate of tax applied to the last unit of income or additional dollar earned, indicating how much of the next earned dollar will be taken in taxes.