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Chapter 13, Problem 6Q
To determine

The reason why the Federal Reserve and government intervened to bail out AIG

Context Introduction:

In order to avoid a looming financial crisis in 2008, the US Federal Government decided to go for an 85 billion dollar bail-out to get control over the insurance company American International Group (AIG) to prevent it from going bankrupt. Bail-outs are seen as controversial as they involve the use of taxpayers money to write off a failing enterprises’ liabilities.

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