Two Actions by the Fed During Alan Greenspan's Term as Chairman

question 250

Multiple Choice

Two actions by the Fed during Alan Greenspan's term as chairman have been identified as possibly contributing to the financial crisis in 2008.Which of the following was one of those actions?

• A)decreasing the money supply to fight the possibility of disinflation
• B)the decision during 1998 to help save the hedge fund Long Term Capital Management
• C)working in concert with the European Central Bank to stabilize the dollar / euro exchange rate
• D)financing the war in Afghanistan by printing money and generating rapid inflation

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Definitions:

Aggression

Behavior aimed at causing harm or intimidation to others, which can be physical or verbal, and is influenced by biological, psychological, and environmental factors.

Acetylcholine

A neurotransmitter in both the peripheral nervous system and central nervous system in many organisms, including humans.

Curare

A toxic compound derived from South American plants, used historically as a paralyzing agent on arrows and in medical settings to relax muscles during surgery.

Homeostasis

The self-regulating process by which biological systems tend to maintain stability while adjusting to conditions that are optimal for survival.