Two actions by the Fed during Alan Greenspan's term as chairman have been identified as possibly contributing to the financial crisis in 2008.Which of the following was one of those actions?

Question

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Keeping the federal funds rate at 1 percent from June 2003 to June 2004 encouraged risky lending and contributed to the housing bubble that eventually burst and led to the financial crisis in 2008. Decreasing the money supply to fight disinflation would have the opposite effect of encouraging lending, and working with the European Central Bank to stabilize exchange rates is not directly linked to the financial crisis. Financing the first Gulf War through money printing occurred before Greenspan's term as chairman.

Two Actions by the Fed During Alan Greenspan's Term as Chairman