he 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.
You are required to make an initial post that answers the questions below. PLEASE PROOF your work before posting. Make sure it is professional and represents your best effort. You will not be able to see the posting of your peers until you make your post. After that, please read the posts of your classmates and reply in a meaningful way to at least 2 by Friday. Reply comments that only say “I agree” or “Awesome” will lose points. You are strongly encouraged to look at the rubric grading below to see how your entry and replies will be scored. On Saturday and Sunday, please check the discussion board again and reply to your instructor if your instructor commented on your post and your peers if they asked you any questions.
Please answer the following questions in your initial post:
- 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. (up to 10 points)
This assignment is worth up to 20 points towards your final grade. Click here to view the grading rubric