Question

During the economic downturn of 2008-2009, the U.S. government "bailed out" AIG to prevent that financial institution from collapsing because it felt that if AIG collapsed, it would lead to serious consequences for the entire U.S. financial system. By helping out this troubled firm because it appeared vital to national interests, the U.S. government was acting as a ____ economy.

Answer 1

The U.S. government was acting as a mixed economy during the economic downturn of 2008-2009 when it bailed out AIG to prevent the collapse of the financial system. This intervention was necessary to prevent serious consequences for the entire U.S. economy.

Step-by-step explanation:

The U.S. government was acting as a mixed economy during the economic downturn of 2008-2009. A mixed economy is an economic system that combines elements of a market economy, where goods and services are produced and distributed based on supply and demand, and a command economy, where the government plays a significant role in economic decision-making. In this case, the government intervened to prevent the collapse of the financial system by bailing out AIG because it believed that the consequences of its collapse would be detrimental to the entire U.S. economy.