Federal Reserve Responses to the COVID Crisis At The Federal Reserve has moved quickly and aggressively to support the economy during the COVID crisis. It has repeated many of the actions it took during the 2008-09 subprime crisis and 2012-2016 slow recovery. That includes cutting interest rates and injecting money into the economy. In addition this time, the FED is moving into buying corporate bonds, funds to support corporate lending and direct lending to states and localities. Here is an analysis of what the FED is doin 1) Do you think the FED is doing enough, especially now that it looks like the COVID impact may be more severe than initially thought? If yes, why? If no, what more should it do? 2) Should the public be worried that the FED may be taking on new risk by lending to corporations and state/local governments? Why or why nnt?
Federal Reserve Responses to the COVID Crisis At The Federal Reserve has moved quickly and aggressively to support the economy during the COVID crisis. It has repeated many of the actions it took during the 2008-09 subprime crisis and 2012-2016 slow recovery. That includes cutting interest rates and injecting money into the economy. In addition this time, the FED is moving into buying corporate bonds, funds to support corporate lending and direct lending to states and localities. Here is an analysis of what the FED is doin 1) Do you think the FED is doing enough, especially now that it looks like the COVID impact may be more severe than initially thought? If yes, why? If no, what more should it do? 2) Should the public be worried that the FED may be taking on new risk by lending to corporations and state/local governments? Why or why nnt?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Please answer both 1 and 2 questions.
Transcribed Image Text:Federal Reserve Responses to the COVID Crisis At
The Federal Reserve has moved quickly and aggressively to support the economy during the COVID crisis. It has repeated many of the actions it took during the
2008-09 subprime crisis and 2012-2016 slow recovery. That includes cutting interest rates and injecting money into the economy. In addition this time, the FED is
moving into buying corporate bonds, funds to support corporate lending and direct lending to states and localities.
Here is an analysis of what the FED is doin
1) Do you think the FED is doing enough, especially now that it looks like the COVID impact may be more severe than initially thought? If yes, why? If no, what more
should it do?
2) Should the public be worried that the FED may be taking on new risk by lending to corporations and state/local governments? Why or why not?
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