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Toll Brothers,a Residential Home Builder,did Well During the Recession in 2001

Question 5

Multiple Choice

Toll Brothers,a residential home builder,did well during the recession in 2001 but did not do so well in 2007 after the housing bubble burst.The reason for this is

A) the Fed lowered interest rates in 2001 but raised interest rates in 2007 to help fight inflation.
B) the Fed lowered interest rates in 2001 but did not believe that cutting the interest rate in 2007 would be enough to revive the housing market.
C) the Fed raised interest rates in 2001 but did not believe that cutting the interest rate in 2007 would be enough to revive the housing market.
D) the Fed raised interest rates in 2001 but lowered interest rates in 2007 to revive the housing market.
E) the Fed raised interest rates in 2001 and raised interest rates in 2007 to help fight inflation.

Correct Answer: