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What Was the Rationale for the Fed Lending Billions of Dollars

Question 83

Multiple Choice

What was the rationale for the Fed lending billions of dollars to the insurance company American International Group (AIG) ?


A) The Fed knew it would receive a high return on the loan.
B) The Fed was following a long-time precedent in rescuing top insurance companies.
C) If AIG collapsed,the insurance industry would as well.
D) The money AIG owed to banks posed a systemic risk.

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