How did the Troubled Asset Relief Program (TARP) help the banks in the U.S. during the financial crisis of 2007-2009?
What will be an ideal response?
At the peak of the 2007-2009 financial crisis, the U.S. Congress passed emergency legislation authorizing the Treasury Department to spend $700 billion to stabilize the financial system. Of the $700 billion in TARP funds, $115 billion was used to increase the capital of the eight largest U.S. banks, which were all forced to participate. In essence, the banks were required to issue new shares that the government bought. Some of the banks didn't like this plan, since the government became a partial owner. In addition, all eight banks were obligated to limit the compensation of their senior executives. An additional $135 billion was used to increase the capital of smaller banks that applied for TARP support. These bank capital infusions – totaling $250 billion – gave the participating banks breathing room, and the financial system as a whole stabilized.
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In the classical model, what is the result of an increase in aggregate demand?
A) The price level increases, and real GDP remains constant. B) The price level decreases, and real GDP remains constant. C) Real GDP increases, and the price level remains constant. D) Real GDP decreases, and the price level remains constant.
U.S. national defense spending is approximately ____ the amount spent on health care
a. twice b. four times c. ten times d. 1/4
If ink and cartridge are consumed in specific proportion, the indifference curve for ink and cartridge is likely to be _____
a. a straight line b. downward sloping c. L-shaped d. U-shaped
Which one of the following would create a demand for a foreign currency and supply of dollars in the foreign exchange market?
a. the sale of U.S. automobiles to a Mexican consumer b. the spending by British tourists in the United States c. the purchase of 1,000 shares of IBM stock by a Latin American investor d. the purchase of Japanese televisions by an American distributor