Ashford ECO 406: Week 4 – DQ 1 – Effective Policy

Ashford ECO 406: Week 4 – DQ 1 –  Effective Policy

1st Posting Due by Day 3. Effective Policy? Evaluate the effectiveness of monetary policy during the 2008 recession in the United States. Does the role of monetary policy increase the volatility of growth in the monetary base and Real GDP in the U.S? Respond to at least two of your classmates’ postings.

 

 

 

 

 

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Effective policy?

            In 2008, the monetary policy was not very effective. The Fed failed to regulate the way people were lending money which in turn plunged the economy of the country in to a very difficult position. The country suffered because people borrowed heavily from the financial institutions and were not paying back. The banks also ended up to use money to repair the damages they incurred instead of realizing the money to circulate (Hansen, 2006).

            Monetary policy influences the growth volatility…

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