Assignment
In 3-4 pages, explain how declines in real estate values, subprime mortgage loans, and mortgage backed securities relate to the financial crisis of 2007-2008. Analyze the idea that monetary policy can exhibit cyclical asymmetry.
Requirements
There are two parts to this assessment. Be sure to complete both parts before submitting.
Part I
• Explain how each of the following relate to the financial crisis of 2007-2008:
o Declines in real estate values.
o Subprime mortgage loans.
o Mortgage-backed securities.
Part II
• Analyze what economists mean when they say that monetary policy can exhibit cyclical asymmetry.
o How does the idea of a liquidity trap relate to cyclical asymmetry?
o Why is the possibility of a liquidity trap significant to policymakers?
Organize your assessment logically with appropriate headings and subheadings. Support your work with at least 3 scholarly or professional resources and follow APA guidelines for your citations and references. Be sure to include a title page and reference page.