3.At the time of the 2009 Great Financial Crisis, federal policy makers knew that “something” needed to be done to increase the prospects of a healthier economy. In March of this year policy makers felt the same way vis-à-vis the Covid pandemic. Please answer the following questions about that response. a. Assuming that one knows what fractional reserve banking is, explain the FED’s ability to have an economic impact and how that impact did not create huge upward pressures on prices. Your answer must combine the idea of banking reserves, money supply creation, and FED policy regarding reserves. b. Compile (and document) 4 things that the Federal Reserve did to fight the negative consequences of the pandemic. c. For each of the 4 things you identified in part b. explain whether each would impact one of more of the following: Aggregate Demand, Aggregate Supply, long run potential output.
3.At the time of the 2009 Great Financial Crisis, federal policy makers knew that “something” needed to be done to increase the prospects of a healthier economy. In March of this year policy makers felt the same way vis-à-vis the Covid pandemic. Please answer the following questions about that response.
a. Assuming that one knows what fractional reserve banking is, explain the FED’s ability to have an economic impact and how that impact did not create huge upward pressures on prices. Your answer must combine the idea of banking reserves, money supply creation, and FED policy regarding reserves.
b. Compile (and document) 4 things that the Federal Reserve did to fight the negative consequences of the pandemic.
c. For each of the 4 things you identified in part b. explain whether each would impact one of more of the following: Aggregate Demand,
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