Description
Deliverable Length: 800–1,000 words
The financial crisis of 2008 caused macroeconomists to rethink monetary and fiscal policies. Economists, financial experts, and government policy makers are victims of what former Fed chairman Alan Greenspan called a “once in a century credit tsunami”.
Since then, there have been various legislative and policy strategies considered and implemented to ‘fix’ the problems that allowed the crisis. The true question is whether we are headed down the same path, and if the ‘victims’ of the 2008 crisis have done anything to shift the tide. Review this clip, and review your own additional research, then share your thoughts on what caused the financial crisis and whether the United States is going in the right or wrong direction with its current policies. In explaining your position, be sure to include cited research that supports your consideration, recommendations for safeguards going forward, and what role, if any, government should play.
Your discussion should include reflections on both monetary and fiscal policies, clearly noting which caused/remedied the crisis. Make sure you include the following concepts in your analysis:
- Interest rates
- The financial services industries (CDOs, CMOs, the stock market, credit flows, money markets, etc.)
- Tax rebates
- Stimulus
- TARP
- Government debt and deficit
- Inflation
- Unemployment
- Immigration
- GDP
Explanation & Answer
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Running Head: ASSESSMENT OF THE 2008 CRISIS
Assessment of the 2008 Crisis
Name
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ASSESSMENT OF THE 2008 CRISIS
Assessment of the 2008 Crisis
Introduction
The 2008 financial crisis had several serious impacts on the worldwide economy. These
impacts have been experienced for around five years and they been seen as a trouble in the
recuperation procedure. The crisis was for the most part connected with the banking division
exercises. Generally for this situation, it is said that the banks made so a lot of cash. This cash
appears to have been utilized to increase the houses expenses with expanded costs. In the long
run, the financing costs on the credits that were loaned to the clients to build up the residential
apartments were increased. The primary drivers of the emergency that happened include the
following:
What caused the crisis?
Production of an excessive amount of cash
It is said the banks made a lot of cash and channeled it into the economy, in the year
affected. This was effected through the production of credits for the debtors. According to Goh,
et.al (2015), this brought about the expansion in the level of obligations in the economy.
Actually, the banks had multiplied the economy’s level of debt in only seven years. The
postponed insta...
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