Case Study 2 – The Invention of Money
You are supposed to listen to the FIVE This American Life audio clips selected from their episode titled The Invention of Money which is attached to this project. Please stick with the word count on each question, nothing less. Type up your responses in a WORD document.
1. In the opening clip, reporter Jacob Goldstein is trying to understand where all the lost money went during the financial crisis. He asks his business savvy aunt Where did all that money go? and her response is Money is fiction.
What does she mean by saying that money is fiction? (200 words)
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2. The Federal Reserve (the Fed) is the central bank of the United States with the power to create money. When the Fed decides to increase the money supply by creating more money, how do they go about doing this? What role do banks play in this process? What is it that the Federal Reserve buys and sells to achieve their goal? Where does the money come from to pay for all their purchases? (250 words)
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3. During the financial crisis the Federal Reserve bought mortgage backed securities. Why did they do this? How much money were they mandated to purchase these securities how far off were they? (150 words)
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Unfortunately I am having issues uploading all 5 of the audio clips onto this project so once it has been awarded, I should be able to message it to you. Please reach out to me if you have any questions or concerns. Thanks!
