Macroeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506756
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Chapter ST5, Problem 6CQ
To determine
The role of the greed of Wall Street and other banks on the great financial crisis of 2008.
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Some charge that the Crisis of 2008 was caused by the greed of Wall Street firms and other bankers. Do you agree?
Why has the government pumped billions into bank bailouts to prevent them from collapsing?
What is your opinion about bankers getting the largest bonuses during the recession! Is this capitalism? Explain! Some institutions too big to fail? or what! Main Street suffers, Wall Street ?
Chapter ST5 Solutions
Macroeconomics: Private and Public Choice (MindTap Course List)
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- Who was chair of the federal reserve system during the financial crisis of 2008?arrow_forwardConsidering all the bailout money the public has been made responsible for, is the existence of banks and non-bank financial institutions worth it, or would it have been cheaper to the public to simply keep all our money under our mattresses?arrow_forwardWhat happened the financial crisis of 2008 and 2009 ? what can do to ensure it does not happen in the future?arrow_forward
- Why do you think that U.S. banks are prohibited from holding equity as part of their own portfolios? Is this a good thing or a bad? Many politicians are seeking to eliminate the Dodd-Frank Act, while others seek to strengthen it. On which side are you, and why?arrow_forwardWhat do you think prevented the financial crisis of2007–2009 from becoming a depression?arrow_forwardTrue or False? Adam Smith believed that his concept of an “invisible hand” guiding human behavior applied to both goods markets and to financial markets. True or False ? Ben Bernanke believes that Milton Friedman and Anna Schwartz’s explanation of the causes of the Great Depression were silly and wrong.arrow_forward
- Explain why the 2010 Obama Wall Street Reform Act was considered the most extensive overhaul of the US financial system since the Great Depression? What was the logic and need for this law? Explain in detail.arrow_forwardThe Chairman of the Federal Reserve has been given the title as “The 2nd most powerful person in the Free World”. Would you agree with this statement? Why or Why Not?arrow_forwardExplain one example of how the banking system or the financial market failed and caused economic collapse.arrow_forward
- Over the last 10 years the Federal Reserve has substantially changed the way it operates. What is different about how the Federal Reserve now conducts policy? options: it discusses its policy in public and asks for guidance from Congress it gives the public forward guidance on what it will do It is more secretive about interest rate and other policy changes it places fewer regulations on commercial banksarrow_forwardWhat are the factors that typically cause a financial crisis?arrow_forwardCould you add more information regarding the below statement? "I do agree with the notion that the Federal Reserve is the most important financial institution in the world. The reason being that it plays such a pivotal role in the economy - for better or for worse. For example, the federal reserve supervises banking institutions and provides many financial services to the U.S government. In addition, the federal reserve has the power to regulate the economy when it is unstable. For example, the Federal Reserve has the ability to manipulate interest rates in order to stabilize the economy when it is needed most. Overall, without the Fed, the economy would have a much more difficult time maintaining itself. When it comes to inflation specifically, I do believe that the Federal Reserve should step in as it is their responsibility. I think that increasing interest rates could be a significant help, but I think that decreasing the money supply/circulation as well as selling bonds could help…arrow_forward
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