Greenspan Says an Insurance Cut From the Fed Makes Sense

Greenspan Says an Insurance Cut From the Fed Makes Sense

Assessment

Interactive Video

Business

University

Hard

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The video discusses the Federal Reserve's approach to rate cuts during economic crises, such as the Asian crisis in 1998, and the concept of insurance cuts. It highlights the challenges of economic forecasting and the importance of managing risks associated with low-probability, high-impact events. The discussion extends to current issues like trade uncertainty and global growth, questioning the effectiveness of rate cuts in these contexts. Additionally, the video explores fiscal stimulus as an alternative to monetary policy, considering its potential impact on economic growth and inflation.

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5 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What was the primary reason for the Fed to consider rate cuts during the 1998 Asian crisis?

To stabilize the housing market

To increase inflation

To act as a precaution against potential economic downturns

To boost consumer spending

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

How does the speaker describe the effectiveness of rate cuts in addressing trade uncertainty and global economic slowdown?

Rate cuts might help, but there are trade-offs

Rate cuts are always effective

Rate cuts are never effective

Rate cuts are the only solution

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is considered an alternative to monetary stimulus according to the speaker?

Currency devaluation

Interest rate hikes

Fiscal stimulus

Tax increases

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What potential consequence does the speaker mention regarding prolonged deficit increases?

Economic growth

Currency appreciation

Inflation

Deflation

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What historical economic behavior is linked to inflation in the discussion?

Increased savings

Responsible fiscal management

Irresponsible fiscal behavior

Decreased spending