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Federal Reserve Policies during the 2007-2009 Recession
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Federal Reserve Policies during the 2007-2009 Recession
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19. Monetary Policy / Federal Reserve Policies during the 2007-2009 Recession / Problem 1
Problem 1
Why did the Federal Reserve decide to allow Lehman Brothers to go bankrupt?
A
To reduce the Federal Reserve's financial burden.
B
Because Lehman Brothers was not a significant player in the financial market.
C
To prevent moral hazard and discourage risky behavior by financial institutions.
D
Because Lehman Brothers had sufficient assets to cover its liabilities.
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