In 2008, When the U

question 33

Multiple Choice

In 2008, when the U.S. financial system collapsed, it led to:

• A)very high inflation, and the Federal Reserve followed a strict contractionary monetary policy to bring prices down.
• B)the Federal Reserve lowering the interest rate, and the economy revived as businesses and individuals secured low-interest loans.
• C)a severe cycle of deleveraging and a credit crunch for the economy as a whole.
• D)the Federal Reserve increasing the interest rate, which further destabilized the economy.

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Definitions:

Dividend Payments

Cash or stock distributions made by a corporation to its shareholders from its earnings.

Borrowed Money

Funds that an individual or organization takes from another party under the condition of returning it back in the future often with interest.

Accounting Communication Process

The system by which financial information is identified, measured, recorded, and communicated to interested parties.

External Auditors

Independent third-party professionals who examine a company's financial statements to ensure accuracy and compliance with accounting standards.