Overview
Institutional responses to economic shocks are critical for maintaining economic stability. These responses can include monetary and fiscal policies that aim to mitigate the effects of sudden disruptions. Understanding how institutions react to these shocks helps us learn from past experiences and p...
Key Terms
Example: The 2008 financial crisis was a major economic shock.
Example: Lowering interest rates to stimulate borrowing.
Example: Increasing government spending during a recession.
Example: The CARES Act in the U.S. provided financial relief during COVID-19.
Example: The Federal Reserve used quantitative easing after the 2008 crisis.
Example: A lower interest rate can encourage more borrowing.