1. Ben Bernanke admits that

A. small businesses and individuals are having a hard time getting credit

B. monetary policy alone cannot solve the nations economic problems

C. financial regulation generally worked well during the recent crisis.

D. Both A & B are true.

2. Ben Bernanke states that

A. in the past, central banks often viewed financial stability policy as the junior partner to monetary policy.

B. the recent financial crisis underscored that maintaining financial stability is an equally critical responsibility as monetary policy.

C. financial crises will always be with us.

D. All of the above are correct.

3. According to Ben Bernanke, bad mortgage practices included all of the following EXCEPT

A. interest-only (IO) adjustable-rate mortgages (ARMs)

B. short amortization loans (payment period less than 16 years)

C. option ARMs (permit borrowers to vary the size of monthly payments)

D. no-documentation loans