According to the PBS Frontline documentary “Money, Power and Wall Street” in the

Question

According to the PBS Frontline documentary “Money, Power and Wall Street” in the Summer of 2008 after the failure of Bear Stearns, what policies/actions were under taken in face of the growing financial and economic crisis?

a) There was a massive increase in government spending in attempt to restart the economy.

b) The Federal Reserve worked with other central banks around the world to increase the amount of liquidity in financial markets.

c) The FDIC worked to ensure that commercial banks had sufficient levels of bank capital so that they could write-down non-performing assets as needed.

d) Academic economists drafted proposals that were widely disseminated in the popular press about how to address the growing crisis.

e) None of the above.

Explanation / Answer

Correct option: (a) massive increase in government spending

Reason: After the failure of Bear Sterns and 2008 recession, the government tried to influx a massive amount of money in the economy to pick up the falling demand and pull the economy out of recession.

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