Choose 1 of the following topics related to the Great Recession:
• The housing price bubble, collapse, foreclosures, bailout of underwater mortgages
• Subprime mortgages and derivatives, bailout of FNMA, Freddie Mac and AIG
• The banking industry crisis, bailout of commercial and investment banks
(The one chosen is the subprime mortgages and derivatives)
Write a 350- to 700-word analysis of 1 of the following corrective actions taken by the Federal Reserve as a result of the crisis:
• Quantitative easing
• Purchase of toxic assets from financial institutions
• Paying interest on reserve balances
Address the following in your analysis:
• Actions taken by the Federal Reserve to mitigate the crisis
• How the corrective action helped to restore stability to the financial system
• How the corrective action should prevent recurrence of a similar crisis
Note: Use of charts and graphs is encouraged with appropriate citations. Any charts or graphs retrieved from the Federal Reserve Bank of St. Louis FRED website may only be included when the data sources used by FRED are US government sources such as the Bureau of Economic Analysis or the Bureau of Labor Statistics.
Cite at least 2 academically credible sources.
Format your assignment according to APA guidelines.
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Choose one of the following Great Recession-related topics: • The housing price bubble, collapse, foreclosures, and the bailout of underwater mortgages
• Subprime mortgages and derivatives, FNMA, Freddie Mac, and AIG bailouts
• The banking industry’s crisis, as well as the bailouts of commercial and investment banks
(The subprime mortgages and derivatives were chosen.)
Write a 350- to 700-word critique of one of the following Federal Reserve remedial initiatives implemented as a result of the crisis:
• QE (Quantitative Easing)
• Buying toxic assets from banking institutions
• Payment of interest on reserve amounts
In your analysis, consider the following:
• The Federal Reserve’s actions to alleviate the problem
• How the corrective measure aided in the restoration of financial system stability
• How the corrective action should prevent recurrence of
