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, the bailout of FNMA, Freddie Mac, and AIG
The banking industry crisis, the 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 are 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: The 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.’
Sample Solution
