a. In recent times, the Fed has been raising interest rates (clue: via monetary policy). Answer the following questions related to that:
a) What are the ways can the fed raise the interest rate on the economy such as the mortgage rates and other lending rates?
b) Which of the fed monetary policy to raise interest rate would you support? Explain.
b. During the great recessions of 2007-2009, the Fed undertook an unprecedented approach where they bought Mortgage based securities (MBS) that became toxic (severely undervalued). Why did the Fed do it? What were the consequences of the Fed providing liquidity flows to the financial sector of USA? Would you support the Fed does this again in the future? Why or why not?