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The Great Recession • In Chapter 29, read "The Great Recession" section and answer the following questions: 1. A boom in what industry set up the economy for an economic shock? 2. How did the Federal Reserve respond to the economic recession?​

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Explanation:

1.In economics, a shock is an unexpected or unpredictable event that affects an economy, either positively or negatively. Technically, it is an unpredictable change in exogenous factors that is, factors unexplained by an economic model which may influence endogenous economic variables.

2.The Fed employs various monetary policy tools in order to suppress unemployment rates and re-inflate prices. These tools include open market asset purchases, reserve regulation, discount lending, and forward guidance to manage market expectations.

Answer:

1. Housing

2. It lowered interest rates, making more money available in the economy.

Explanation:

The fall in housing prices also triggered a decline in consumer and business confidence.

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