Causes of ongoing turmoil in financial markets and policies introduced by Fed in this regard.
a. Explain what factors led to the ongoing turmoil in financial markets.
b. Discuss three non-traditional policies that the Fed has introduced in response to the financial turmoil and the reason for introducing each of them.
c. Interest rates were virtually zero in Japan in the late 1990s. Did these low interest rates stimulate demand for goods and services? Explain with the help of the appropriate concept.