Each essay item must be responded to. 

Anonymous
timer Asked: Nov 29th, 2016

Question description

1. The US Federal Reserve is designed in a way that leaves it largely independent. Do economists generally believe that an independent central bank is a good thing or a bad thing? . . . Why is the economic consensus so strong on the issue of an independent Fed?

2. Explain how the notion of "moral hazard" applied to the 2008-2009 financial crisis through the passage and administration of the Troubled Asset Relief Program (TARP). In your estimation, was "bailing out" the financial sector merely the best option among bad options or was it just bad policy? Explain the choices facing policymakers at the times and the perceived outcomes of each option.

3. Explain, using six declarative statements, how expansionary and contractionary monetary policies can be implemented by changing interest rates, the reserve requirement, and conducting open market operations.

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