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The US was in a dangerous financial situation that was at risk of getting much worse. What did JP Morgan do about this problem?

a) He lobbied the government for financial aid.
b) He invested heavily in the stock market.
c) He purchased failing businesses to stabilize the economy.
d) He used his own fortune to bail out the government.

User CodingCat
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1 Answer

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Final answer:

J.P. Morgan responded to the 1907 financial crisis by using his wealth to bail out failing banks, which helped stabilize the U.S. economy and restore investor confidence.

Step-by-step explanation:

In response to a financial crisis in 1907 known as the "Bankers' Panic," where the U.S. economy was severely threatened, J.P. Morgan took decisive action. Instead of seeking financial aid from the government or solely investing in the stock market, Morgan used his considerable personal wealth to provide emergency financing to banks on the brink of failure. This injection of capital helped restore investor confidence in the financial system and played a crucial role in stabilizing the economy at a critical moment.

By using his resources, J.P. Morgan prevented many banks from collapsing, which would have had a catastrophic impact on the U.S. economy. His intervention exemplifies how private wealth was used by financiers to avert economic disaster before mechanisms like the Federal Reserve were in place to address such crises. Therefore, the correct answer to what J.P. Morgan did about the financial situation is d that he used his fortune to bail out the government.

User Skaurus
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