Use its authority to attempt to stimulate the economy

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The 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.

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.

Reference no: EM131654060

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Use its authority to attempt to stimulate the economy : Describe how the Federal Reserve can use its authority to attempt to stimulate the economy.

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