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- 1. Describe how the Federal Reserve can use its authority to attempt to stimulate the economy. 2. One of the major problems that led to the financial crisis was the ‘’ housing bubble.’’ What is meant by this term. 3. Name and explain two of the reasons the congressional committee identified for the recent financial crisis.Which of these statements are true? The discount rate is normally equal to the federal funds rate. The federal funds ratre is normall higher than the discount rate. The Federal Funds rate is the rate that banks are charged when they borrow from the Fed. O The discount rate is normally higher than the federal funds rate.Predict what will happen to interest rates on a corporation’s bonds if the federal government guaranteestoday that it will pay creditors if the corporation goesbankrupt in the future. What will happen to the interestrates on Treasury securities?
- A. In a well-developed paragraph explain to me the origins of the financial crisis in the US as well as how it spread from the housing sector to other sectors of the economy and almost undermined the whole US financial system. Give me a list of the main economic actors who were responsible broadly conceived (e.g., regulators) (feel free to use bullet points). In what ways were Hank Paulson, Ben Bernanke, and Tim Geithner the right people at the right time to cope with the urgency of the crisis. You can disagree with my arguments from class if you want but either way give me reasoned arguments based on empirical evidence. I am not a fan of ideological arguments.7Pls help with below homework. Which are the three main ideas that Walsh (2001) explains to be what thecentral banks can be transparent with ? Explain each one througly.
- During the global financial crisis, how was the Fed ableto help offset the sharp increase in financial frictionswithout the option of lowering interest rates further?Did the Fed’s plan work?5-7 pleasePls help with below homework. Explain in 7-8 sentences only When and how would the FOMC use quantitative easing and targeted asset purchases?
- What is a lender of last resort? O An institution, typically a financial institution, that can provide short term liquidity during a financial crisis. A firm that needs to borrow during crisis A group of lenders that need ot be paid immediately. A bank that has offices in resorts.b. What substantial risks to the nation was the director of the CBO referring to? The director was referring to O A. really not much of a concern at all because the U.S. economy continues to grow at a rate higher than the rate at which the debt is rising, so that the debt-to-GDP ratio is falling and a high debt level is a non-issue. B. the certainty that the government will go bankrupt if the ratio of debt to GDP rises too high and it is no longer able to fulfill its obligations to its citizens. C. a high and rising debt-to-GDP ratio putting upward pressure on interest rates, thereby crowding out private investment and slowing economic growth, and rising interest payments on that rising debt eventually putting pressure on the federal government to reduce program spending or raise taxes. D. a high and rising debt-to-GDP ratio putting downward pressure on interest rates, thereby encouraging private investment and increasing economic growth, and falling interest payments on that rising…The Federal Reserve has raised the Federal Funds rate by 3.75 percent within the past year. Ifa bank had capital of 10 percent when the Fed began raising rates and has no loans at risk ofdefault, under what circumstances will its capital position be compromised? Please be specific.