Black Monday 1987: AP Macroeconomics Study Guide

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AP Macroeconomics Connections

Black Monday is a useful case study in central bank crisis response: Greenspan's brief, decisive statement affirming Fed liquidity support illustrates how forward guidance and lender-of-last-resort actions can stabilize a panicking market. It also raises questions about market efficiency and the risks of automated trading strategies amplifying volatility.

Key Terms to Know