Problem
Choose 1 of the following topics related to the Great Recession:
1) The housing price bubble, collapse, foreclosures, bailout of underwater mortgages
2) Subprime mortgages and derivatives, bailout of FNMA, Freddie Mac and AIG
3) The banking industry crisis, bailout of commercial and investment banks
(The one chosen is the subprime mortgages and derivatives)
Write 350 to 700 words analysis of 1 of the following corrective actions taken by the Federal Reserve as a result of the crisis:
1) Quantitative easing
2) Purchase of toxic assets from financial institutions
3) Paying interest on reserve balances
Address the following in your analysis:
1) Actions taken by the Federal Reserve to mitigate the crisis
2) How the corrective action helped to restore stability to the financial system
3) How the corrective action should prevent recurrence of a similar crisis.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.