In September of $2008,$ the Federal Reserve announced a "bailout" for AIG, which had gone bankrupt after having its credit rating downgraded in the wake of the financial crisis of $20072008.$ Can you think of an argument against such a bailout that is related to the material in this chapter?

Group of answer choices

Bailing out financial institutions can lead to moral hazard.

Bailing out financial institutions can lead to adverse selection.

Bailing out financial institutions can lead to signaling.

None of the material in this chapter is related to arguments against bailouts.