The government passed the Economic Recovery Act in October 2008 to prevent the financial crisis from continuing to worsen. A controversial component of this act was the
A)temporary decrease in the federal deposit insurance limit.
B)sale of new subprime mortgage assets.
C)borrowing of $150 million from AIG.
D)Troubled Asset Relief Program (TARP).

Question

Quizplus · Accepted Answer

The Troubled Asset Relief Program (TARP) was a controversial component of the Economic Recovery Act that aimed to stabilize financial markets by allowing the government to purchase toxic assets from struggling financial institutions. Despite controversy, TARP ultimately helped to prevent the economy from collapsing and played a significant role in stabilizing the banking system. The other options listed - a temporary decrease in the federal deposit insurance limit, the sale of new subprime mortgage assets, and borrowing from AIG - were not major components of the Economic Recovery Act.

The Government Passed the Economic Recovery Act in October 2008