Introduction The latest financial crisis between 2007 and 2012, was the worst of the 20th and the 21st century after the great depression of 1930’s according to economists. The recent financial crisis was mainly felt in2007 and 2008 and with the other four years following being tasked with living in the shadow of the crisis and trying to recover from it. It not only hit the U.S.A but it was a global crisis which affected Europe leading to the Euro crisis in 2008 and also threatened a reoccurrence of the Asian 1997 crisis. The financial crisis affected the economy at large and was largely blamed on the cheap housing policies enacted encouraging homeownership, lax lending habits among others. The financial crisis of 2007 started with the collapse of the Northern Rock British bank in August 2007. The tax lending rates of mortgages that followed the 2004 70% increase in homeownership led to lenders in early 2007 to file for bankruptcy as the home prices had fallen so low in between 2005 and 2007 leading to homeowners falling back on their mortgages and the lenders would not get the full value of the house due to the decline in market prices. The federal funds rate which was 4.75% in 2007 was reduced to 1% in order to cushion the crisis in 2008. this led to different policies being enacted in order to salvage the economy which was spiraling down the drain. Policies such as: The Dodd and Frank act of 2010 Economic Stimulus Act of 2008 American Recovery and Reinvestment Act of 2009 The unemployment insurance policy 2 THE DODD AND FRANK ACT OF 2010Effects TargetedShort-run effectsIt was meant to safeguard against excessive risk investment: this was in respect to Wall-Streets behavior of investors investing in risky projects. The short-run effects are mainly felt by the consumer and short-term investors. This is through; Wall-Streets accountability Regulatory system in mortgages and lending servicesEnsure Wall-Street was accountable; Wall-Street was being bailed out by the government due to its failures.Protect families form exploitative financial activities Consumer protection People in Wall-Street took huge risk endangering the economy. And due to the governments failure of checks on balances in Wall-Street this went on for some time before it led to the depression and the financial crisis. It was then left upon the federal government to bail it out. This act proposes a transfer of liability from the government back to Wall-Street and accountable measures put in place. The short-run effects have helped in the accountability of Wall-Street, this will lead to short-term investors being more aware of their role in Wall-Street and what they shouldn’t do. The Consumer Financial Protection Bureau was created in ensuring that consumer interests are taken into account and that individuals out to take loans and mortgages are not buried in paper work that would be confusing for some one who is not an educ.

1. Introduction
The latest financial crisis between 2007 and 2012, was the worst
of the 20th and the 21st century after the great depression of
1930’s according to economists.
The recent financial crisis was mainly felt in2007 and 2008 and
with the other four years following being tasked with living in
the shadow of the crisis and trying to recover from it.
It not only hit the U.S.A but it was a global crisis which
affected Europe leading to the Euro crisis in 2008 and also
threatened a reoccurrence of the Asian 1997 crisis.
The financial crisis affected the economy at large and was
largely blamed on the cheap housing policies enacted
encouraging homeownership, lax lending habits among others.
The financial crisis of 2007 started with the collapse of the
Northern Rock British bank in August 2007. The tax lending
rates of mortgages that followed the 2004 70% increase in
homeownership led to lenders in early 2007 to file for
bankruptcy as the home prices had fallen so low in between
2005 and 2007 leading to homeowners falling back on their

2. mortgages and the lenders would not get the full value of the
house due to the decline in market prices.
The federal funds rate which was 4.75% in 2007 was reduced to
1% in order to cushion the crisis in 2008. this led to different
policies being enacted in order to salvage the economy which
was spiraling down the drain. Policies such as: The Dodd and
Frank act of 2010
Economic Stimulus Act of 2008
American Recovery and
Reinvestment Act of 2009
The unemployment insurance policy
2
THE DODD AND FRANK ACT OF 2010Effects TargetedShort-
run effectsIt was meant to safeguard against excessive risk
investment: this was in respect to Wall-Streets behavior of
investors investing in risky projects.
The short-run effects are mainly felt by the consumer and short-
term investors. This is through;
Wall-Streets accountability
Regulatory system in mortgages and lending servicesEnsure
Wall-Street was accountable; Wall-Street was being bailed out
by the government due to its failures.Protect families form
exploitative financial activities
Consumer protection
People in Wall-Street took huge risk endangering the economy.
And due to the governments failure of checks on balances in
Wall-Street this went on for some time before it led to the

3. depression and the financial crisis. It was then left upon the
federal government to bail it out. This act proposes a transfer of
liability from the government back to Wall-Street and
accountable measures put in place.
The short-run effects have helped in the accountability of Wall-
Street, this will lead to short-term investors being more aware
of their role in Wall-Street and what they shouldn’t do.
The Consumer Financial Protection Bureau was created in
ensuring that consumer interests are taken into account and that
individuals out to take loans and mortgages are not buried in
paper work that would be confusing for some one who is not an
educated accountant, economist or lawyer.
3
The Dodd and Frank Act of 2010Long-run effectsDeterminants
of economic outputThe main aim of the Act was to end bailouts
that threw the economy into a mess.
The Volker Rule was to ensure that banks aren't allowed to
operate hedge funds
The Financial Stability Oversight Council and Orderly
Liquidation Authority was to ensure that the long run effect of
big corporations was contained and controlled.
The consumer price index would be most favorable in
measuring the economic output and effect that this policy had.
This is largely due to the fact that the act is more consumer
based and on further analysis it reveals that the consumer has to
pay ore for goods.
The Volker rule was set to ensure that banks and investing
corporations did not take risk venture putting its clients

4. finances at risk and if a crisis was to arise, then the banks and
investing company’s would be able to meet their obligations to
their clients. This was a long term effect since separation of
financial institutions would take time and ensuring security of
clients finances and investment capital would take time.
The Financial Stability Oversight Council and Orderly
Liquidation Authority, was meant to ensure that big
corporations were able to finance their activities and pay pout
their debts by maintaining their acid test ratio at certain level.
This would ensure that the economy does not collapse as it
heavily relies on big corporations and companies in order to
maintain a stable growth rate and maintain stability. The
authority and council was to ensure that checks and balances are
maintained in the big corporations.
The determinants of economic output affected were grave on the
consumer index as it was to protect taxpayers and consumers
but at the same time it created moral hazards and stunted the
growth by putting a cap on the income and commissions that
mortgage agents would collect.
The credit card companies were also affected and by doing so
they made the rates higher and elaborative to the consumer and
by this discouraging consumers on spending as they were more
aware of their responsibilities and liabilities with the interest
accrued.
4
The Economic Stimulus Act of 2008ResponsibilityShort-run
effectsIt aimed at reducing the tax burden of the middle income
families and businesses.
Increase the consumer price index through encouraging them to
use their tax rebates.
Reduce the rate at which house prices were reducing as was the
case in 2007.
Increased the consumer price index.
Increase investments for businesses

5. The Economic stimulus act of 2008 was aimed at ensuring that
the economy and the people did not suffer too much. By doing
this, the act was cushioning the middle class society which was
the most affected by the economic depression. It aimed at
increasing the spending of the consumer and making the life of
middle class families easier. The tax rebates which would
become active mid-2008, would offer the holders of the rebates
more funds to spend hence increasing the consumer price index
and giving investors opportunities to invest.
The prices of homes was declining and the federal government
wanted the price not to decline lower than they were or at a
progressive rate..
The short-run effects that were experience was in accordance to
the provisions of the act, the consumer price index increased as
consumers were able to buy more products and goods as was
opposed to 2007. businesses investment also increased since
investors were encouraged by the performers of tax rebates to
the consumers and hence they increased output.
The tax rebates to the middle-class businesses was also
effective as the tax burden was decreased on them meaning they
had more funds to invest and grow their business even as the
economy was deteriorating.
5
The Economic Stimulus Act of 2008Long-run
effectsDeterminants of economic outputIncreased government
revenue.
The consumer price index would be helpful in ascertaining
whether the tax rebates worked.
The gross domestic output assisted in measuring whether

6. investment increased.
Monetary and fiscal policies would be effective in measuring
the long run effect.
The Economic Stimulus Act of 2008 was aimed at ensuring that
though the government would spend and its revenue decrease in
2008, by 2018 the revenue would increase as corporations,
companies and businesses would report lower depreciation rates
on their assets. This would increase the revenue that the
government would collect over the following 10 years.
After the great depression of the 1920’s the fiscal policy
worked as the budgeted of preceding years was mostly stable.
The fiscal and monetary policy would assist in ascertaining
whether the economy has been stable following the enactment
of the Economic Stimulus Act 2008.
The gross domestic output measures the productivity of the
economy. Reeling from an economic depression, the GPO helps
to measure the output levels that have been achieved and if the
policies that were put in place are efficient. With the Economic
Stimulus Act targeting increased investment the GPO would be
useful in measuring whether output and investments increased.
6
American Recovery and Reinvestment Act of
2009Responsibility and target
Short-run effects
Save and create jobs in the economy
Increase in government expenditure on infrastructure, education
and health.
Economic oversight board in the form of the President

7. Economic Recovery Advisory Board.
Cyclical monetary and fiscal policy support for the economy.
Creation of employment aimed at families which were executed
through tax cuts.
Transparency on the economy to the nation and the congress.
Increase in the GDP by 2%.
The ARRA of 2009, was aimed at ensuring that the economy
recovered and that employment was created and no more job
cuts and retrenchments were effected. This was achieved
through tax cuts both on the individual and also on the
businesses and corporations. The increase in expenditure was to
ensure that employment was created and that more money was
injected into the market for circulation.
The economic oversight board was to ensure that the policies
and the economy were performing effectively. The board reports
to Congress hence ensuring transparency and efficiency.
The cyclical monetary and fiscal policy support is both a short-
term and long-term effect and goal. This measure ensure that
the economy has had and will have support over time no matter
the effects of the market.
The $787 million, would assist with the job creation and also
funding the governments projects especially on infrastructure,
health and education. The GDP increase by 2% in between 2008
and 2009 due to the ARRA and the effects it brought about.
7
American Recovery and Reinvestment Act of 2009
cont’d.Long-term effects

8. Determinants of economic output
Increase investment in health and technology advances.
Cyclical monetary and fiscal policy support for the economy.
State fiscal relief, aimed at states who had been hit hard by the
financial depression.
Monetary and fiscal policy
The interest rates, this is the case with the GDP rate and also
cyclical monetary and fiscal policies.
The increase in technology research and advancement in
education and health is attributed to the fact that government
spending would be heavily reliant on the education, health and
infrastructure sector. This assisted in increasing the GDP in
2009 as the technology sector increased and advancement plan
were put in place.
The interest rates would be effective in measuring the economic
output triggered by the ARRA by measuring the rate at which
states that receive the recovery funds grow in comparison to the
states that do not receive the funds. This would assist by
measuring the rate of growth and the interest rates that banks in
that state would be offering and the market rates that are
acceptable to the consumers.
The cyclical effects of the monetary and fiscal policy would be
measured by how stable the economy remains in respect to the
world economies versitility and also in comparison with the
European economy as it was affected by the Euro Crisis which
did not effect the economy due to the fiscal and monetary
policies that the ARRA contained.

9. 8
The unemployment insurance policy targets
Short-run effects
Decreased unemployment
Increasing unemployment benefits.
Increase of funds to states to offers incentives to them to
increase the unemployment benefits.
Increase consumption and also the Medicaid.
Increase in consumption; this was due to the fact that the
unemployment insurance offered the unemployed more funds to
buy commodities.
Increase in money in circulation, this was due to the $5 billion
that the federal government was offering the states as incentives
to increase the UI.
The decreased unemployment would come through the jobs
created by the increased insurance on the unemployed as more
personnel would be required to make the policy effective.
Corporations would also seek to increase their employment rate
in order to reduce the tax liability that they bear. This was
mainly due to the fact that businesses with a personnel of more
than 15 employees would be exempt on some cases.
The short-run effects would lead to an increased GDP in the
long run as investors and producers rely on present data in order
to forecast future consumer spending. The increase in money in
circulation would make it easier for investor as it would be
cheaper to conduct businesses and to invest.
9

10. The unemployment insurance policy Long-term effects
Economic growth determinants
Increase in GDP due to the increase in consumer expenditure.
Decrease in unemployment rate but increase in long-term
unemployment.
The unemployment rate, in this case the unemployment rate
reduced drastically in 2014 when the UI had expired.
The GPO measure would be used in determining that the levels
of output increased.
The unemployment rates though have decreased in recent years,
but it is not due to the implementation of the unemployed
insurance act, but its been due to the absence and expiry of the
unemployment insurance act. Also the act has increased the long
term unemployment estimates as employers will find it hard to
hire more employees with time.
The GPO would increase due to the fact that recent consumers
are buying more at the present market prices. Though this is a
wrong assumption according to most economies. Investors and
producer would be better of increasing their output but ensuring
that they take into consideration the views of various
economist.
10
Conclusion
The policies enacted after a great depression are supposed to be
a transitioning from the depression to a stable economic
environment.

11. The policies are supposed to help the economy grow and pick
up from the depression.
The recent depression offered insight into the governments
failure to regulate Wall-Street and also the failure of Wall-
Streets accountability.
The policies are a helping hand and away to ensure that
economic depressions are alleviated.
By ensuring that Wall-Street was accountable, the Frank and
Dodd Act ensured that a economic depression triggered by
unscrupulous investors was alleviated and that clients of banks
and investing firms are able to get their capital and funds back.
The policies especially the Economic Stimulus Act of 2008 and
the ARRA of 2009 were meant to assist the consumers and
citizen in growing and ensuring that tax payers and the middle
class society do not bear the blunt of economic shortfalls of the
first class society.
11
Refernces
Gapinski, J. (1982). Macroeconomic theory: Statics, dynamics,
and policy. New York [etc.: McGraw-Hill.
Hendrickson, J. (2011). Regulation and instability in U.S.
commercial banking a history of crises. Basingstoke: Palgrave
Macmillan
Kurt, A., & Wise, A. (n.d.). An Empirical Study to Assess the
Effectiveness of U.S. Fiscal Policy.
The Economic Stimulus Act of 2008. - Free Online Library.
(n.d.). Retrieved August 21, 2015.
Dodd–Frank Wall Street Reform and Consumer Protection Act
... (n.d.). Retrieved August 21, 2015.

12. In a well-constructed presentation, identify four policies the
government enacted following the financial crisis. Evaluate
what effect these policies would have on the economy from both
a short-run and a long-run perspective. Be sure to include:
· The distinction between the short-run and long-run economic
views and what determines economic output in the relative time
periods
· A definition of the measures used to determine economic
success in the different time periods
· A link from each policy back to these distinctions and
measures.
The presentation should lead the viewer through the information
in sequential order, with transitions of some type, making the
presentation cohesive. An introduction, a body, a conclusion,
references, and a citation page are to be included. The
presentation must meet these requirements:
· Between ten and sixteen slides
· Each slide must include text or audio narration.
· Each slide must include at least one image.
· Include a two-page transcript to accompany the presentation.
· Information must be thoroughly covered in the presentation
and accompanying narration, as you will not present to your
classmates or instructor.