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blinkrb blinkrb
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2 months ago
Give an example on how an expansionary policy can cause a recession.
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Macroeconomics


Edition: 3rd
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denitra31denitra31
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More solutions for this book are available here
During 2002-2005, the Fed lowered the federal funds rate to 1 percent, even though the economy was already growing. This caused the housing market to be caught in an unsustainable speculative bubble, which partly caused the subsequent recession. Asset bubbles are typically followed by recessions, because they amplify economic fluctuations.

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blinkrb Author
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You make an excellent tutor!
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Brilliant
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Thank you, thank you, thank you!
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