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Monetary & Fiscal Policies

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Title: Monetary & Fiscal Policies

Essay Details:

Subject: Business

Author: Douglas J

Date: June 30, 2013

Level: University

Grade: A

Length: 3 / 651

Essay text:

With the boom on the housing market in 2002 and the inflationary rise in housing prices, government policies were imposed to slow and adjust the housing sector. The government used contractionary policy to slow down aggregate demand and stabilize prices. One of the tools used was increased interest rates. With the sub-prime mortgage rates adjustments starting in 2006 many home owners are unable to sustain the adjusted rates and mortgage payments therefore, forcing mortgages into foreclosure. Coupled with the mortgage industry meltdown, falling housing market and higher interest rates the economy began a downward spiral...

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