What Unusual Measures Did the Fed Take in Trying to Reduce

question 56

Multiple Choice

What unusual measures did the Fed take in trying to reduce the risk premium during the Financial Crisis of 2007-2009?

• A) buying mortgage-backed securities issued by Fannie Mae and Freddie Mac
• B) reducing the federal funds rate multiple times
• C) issuing its own securities
• D) eliminating the discount rate on loans to member banks

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Definitions:

Ionic Bond

A chemical bond formed through the electrical force between oppositely charged ions.

Lewis Theory

A theory in chemistry that explains chemical bonding by electron pair sharing and transfer between atoms, aiming for a stable octet arrangement.

Noble Gas

Any of the inert gas elements located in the rightmost column of the periodic table, characterized by their lack of chemical reactivity.

Valence Shells

The outermost shell of an atom that contains the electrons involved in forming bonds.