Unit (7).docx - Chapter 13 9 The Federal Reserve was...

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Chapter 13 9. “The Federal Reserve was authorized to ensure sufficient money and credit in the banking system as was needed to support a growing economy. The power to issue bank notes was taken away from national banks and turned over to the federal reserve” (McEachern, 2015, p.213). “The Fed’s primary goals, its legal mandates, are price stability and maximum employment” (McEachern, 2015, p.215). “Here are four frequently mentioned goals of the Fed: (I) economic growth, (2) interest rate stability, (3) financial market stability and (4) exchange rate stability” (McEachern, 2015, p.216). 10. “Subprime mortgage is a mortgage for a borrower with a not-so-good credit rating” (McEachern, 2015, p.216). The crisis came from subprime and regular mortgages, bundle into mortgaged back securities, and were sold in a market separate from traditional prime loans. Chapter 14 6. A) It will increase liabilities. B) Increase assets and liabilities. C) It decreases assets and liabilities.
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