Describe how the Federal Reserve can use its authority to attempt to stimulate the economy.

The purpose of this assignment is to describe how the Federal
Reserve controls the money supply and the resulting actions of
consumers. This case study will demonstrate how the Federal Reserve
System works and the various institutions in the U.S. banking
system related to mortgage lending.
Describe how the Federal Reserve can use its authority
to attempt to stimulate the economy. Be sure to include how
interest rates are used to accomplish this. (up to 10
points)
One of the major problems that led to the financial
crisis was the housing bubble. What is meant by the term “housing
bubble”? Be sure to identify how subprime mortgages played a
part.


 

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