Question

Which of the following is not a program initiated by world’s major central banks during the...

Which of the following is not a program initiated by world’s major central banks during the financial crisis of 2007 to avoid a deep worldwide recession?

Multiple Choice

  • Purchase of U.S. dollars

  • Expansion of retail deposit insurance

  • Debt guarantees

  • Capital injections

  • Asset purchases/guarantees

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Answer #1

During financial crisis of 2007, Fed didn't do

(A) Purchase of US Dollars as it soared unexpectedly even though United States was going into recession.It soared because of the weakness of other currency as it was expected to be a global recession than a U.S centric one.

Fed expanded the retail deposit insurance , provided the required debt guarantee , did asset purchase and injected capital through various bailouts and mergers and acquisitions to save the economy overall . So these options are correct.

Only option (A) is wrong as it didn't buy Dollars.

.

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