While Many Analysts Defended the Actions Taken by the U

question 166

Multiple Choice

While many analysts defended the actions taken by the U.S.Federal Reserve and the U.S.Treasury to respond to the financial crisis in 2008, others were critical of these actions.The critics were concerned that by not allowing large firms to fail

• A)smaller firms will resent not receiving similar assistance.
• B)stockholders and bondholders of these firms were not allowed to receive the proceeds from the sale of assets that would have occurred if the firms had declared bankruptcy.
• C)there is an increased likelihood that other firms will engage in risky behaviour in the future with the expectation that they will also not be allowed to fail.
• D)there will be less competition in the U.S.economy, which could led to higher prices for consumers.
• E)there will be fewer opportunities for new small firms to form.

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Definitions:

Interlocking Directorates

A situation where members of a company's board of directors serve on the boards of multiple companies, often leading to conflicts of interest or collusion.

Per Se Violation

A legal doctrine in antitrust law where certain business activities are considered illegal in themselves, regardless of their harm or outcomes.

Antitrust Laws

Legislation enacted to prevent new monopolies from forming and promote competition by prohibiting agreements, practices, or mergers that restrain trade or reduce competition.

Conspiracy

An agreement between two or more persons to commit an illegal act or to accomplish a legal end through illegal actions.