Author Question: How did international policy coordination contribute to the avoidance of an economic depression in ... (Read 51 times)

HCHenry · **on:** Jun 30, 2018

How did international policy coordination contribute to the avoidance of an economic depression in 2008 - 2010?

What will be an ideal response?

Question 2

The index that measures the change in price of a typical basket of consumer goods is

a. the GDP deflator.
b. the consumer price index.
c. nominal GDP.
d. real GDP.

pikon · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

The shadow banking system had become an important source of liquidity in the global economy prior to the crisis. The discovery that collateral was worth far less than it had seemed caused a dramatic reduction in credit everywhere. While central banks and governments sought primarily to aid their own economies, the effectiveness of their interventions was increased by the demonstration that no single economy would be expected to bear alone the burden of restoring liquidity and reducing uncertainty. Rather, the recovery of each economy would be supported by the containment of financial collapse and the recovery of aggregate demand in all affected economies.

Answer to Question 2

B