Exam 36: Global Financial Crisis of 2008 and Beyond

Explain why the economy's potential output is unlikely to return to its pre-GFC level without policy responses.

Without policy responses, the GFC is likely to _____.

Which of the following is not a lesson learned from the GFC?

The global saving glut contributes to large current account _____ in the contributing countries of loanable funds.

Interpret the events occurred during the Global Financial Crisis (GFC).

Describe some of the lessons learned from the Global Financial Crisis (GFC).

Mortgage securitisation refers the process of bundling many mortgage loans together and converting them into tradeable financial instruments (debt securities).

Subprime borrower refers to an individual with high credit ratings and above average income.

Substantial increases in residential real estate prices that do not reflect their fundamental value, and are therefore likely to go down sharply in the future is referred to as _____.

Even without policy responses, the self-correcting mechanism suggests that LRAS will eventually return to its pre-GFC level.

Deleveraging is a process of reducing indebtedness and was even more pronounced at the level of companies and countries.

_____ was implemented in several countries as a recourse around _____.

Fiscal stimulus packages refer to _____.

An insurance contract on a collateralised debt obligation (CDO) promising to cover any shortfall in the CDO income stream is referred to as _____.

Monetary policy responses were rendered ineffective at the height of the GFC in several countries because these countries were caught in _____.

Which of the following is an optimal macroeconomic policy to the GFC shocks?

Which of the following is not related to the propagation of the GFC?