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
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
Note: Use of charts and graphs is encouraged with appropriate citations. Any charts or graphs retrieved from the Federal Reserve Bank of St. Louis FRED website may only be included when the data sources used by FRED are US government sources such as the Bureau of Economic Analysis or the Bureau of Labor Statistics.
Cite at least 2 academically credible sources.