Which of the following is not a way the Fed has tried to soothe troubled world markets?
A) When Mexico faced financial difficulties in 1994, Fed officials helped arrange loans to prevent a financial crisis.
B) A worldwide financial panic in the fall of 1998 because of defaults on Russian bonds prompted the Fed to lower the federal funds rate to supply more liquidity.
C) A worldwide shortage of credit in 2007-2009 caused by mortgage defaults in the United States prompted the Fed to supply additional liquidity to the banking system.
D) The Fed's pursuing its twin statutory mandates of price stability and maximum employment.
E) The Fed chairperson being in frequent contact with other central bankers.

Question

Quizplus · Accepted Answer

The Fed's pursuit of its twin statutory mandates of price stability and maximum employment is not a direct way to soothe troubled world markets. While it can have an indirect impact on global markets, it is not a specific tool or action taken by the Fed to address market turmoil. The other options listed are all examples of ways the Fed has tried to calm troubled world markets.

Which of the Following Is Not a Way the Fed