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