2008 Housing Market Crash Reference August 2007, noted by the vertical dashed ine. At that time, Real GOP (blue line) wa

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2008 Housing Market Crash Reference August 2007 Noted By The Vertical Dashed Ine At That Time Real Gop Blue Line Wa 1 (22.45 KiB) Viewed 16 times

2008 Housing Market Crash Reference August 2007 Noted By The Vertical Dashed Ine At That Time Real Gop Blue Line Wa 2 (18.74 KiB) Viewed 16 times

2008 Housing Market Crash Reference August 2007 Noted By The Vertical Dashed Ine At That Time Real Gop Blue Line Wa 3 (16.16 KiB) Viewed 16 times

2008 Housing Market Crash Reference August 2007, noted by the vertical dashed ine. At that time, Real GOP (blue line) was above Potential GDP (blue line). The Housing Price Index (green Ine) and Federal Funds Rale (purple ine) rep FRED Biens of Chanes 2012 17200 16.000 1400 16.000 15.000 11,200 14.00 14,400 14.000 Real Gross Domestic Product -Real Potential Gross Domestic Product AB Transactions House Price Indes for C100 -Federal Funds Eective Rate night 2001 Shaded areas indicate US recessions Am 2007 Jan 201 294 Sources BEA, CBO FHFA Board of Governors 20 2011 ===CCEFEC het so
What type of policy was the Fed implementing in August 20077 OA Contractionary Fiscal Policy OB Contractionary Monetary Policy OC Expansionary Fical Policy OD Expansionary Monetary Policy Part B) Recessionary Gap -*_*X EX Price Level Real GDP you model the economy ising en ASAD model, based only on Real a A Recession OBS OC Recessionary Gap OD aonary Gap AS/AD Inflationary Gap RGDP Pol GOP the what best characteres this This question: 1 point possible Submit test
Part C) Why would the Fed use policies that appear to contradict the findings of the ASAD model? OA. The Fed believed that the momentum of the housing market would eventually lead to an upcomming recessoin OB. There is no contradictoin; Fed was appropriate in using expansionary policy because Real GDP is above Potential OC. Inflation was a bigger concem at the time so they were responding to controlling inflation rather than worrying about the housing market OD. The ASAD model is an inappropriate model to explain business cycles