The Federal Reserve did not lower interest rates to help the housing market in 2007 because
A) interest rates were already at historically low levels.
B) the unemployment rate was below the natural rate of unemployment.
C) banks held excess reserves instead of making loans.
D) the inflation rate was at or above the level the Fed considered acceptable.

Question

Quizplus · Accepted Answer

The Federal Reserve was concerned about inflation being at or above acceptable levels, which limited their ability to lower interest rates despite the housing market issues.

The Federal Reserve Did Not Lower Interest Rates to Help