One of the most dramatic periods of fiscal stimulus took place during the major recession of 2008-2010. Not only were the conventional fiscal (and monetary) tools employed, but the federal government also pursued certain unconventional initiatives, such as the bailout of financial institutions on the brink of insolvency.
Please watch Inside the Meltdown, a PBS Frontline documentary first broadcast in 2009— https://www.pbs.org/wgbh/frontline/film/meltdown/. Write a 2-3 page paper summarizing the film and addressing the following questions:
a. What is systematic risk?
b. What is a moral hazard?
c. Why did the government treat Bear Sterns differently from Lehman Brothers?
d. What do you think the government should have done with Lehman Brothers?
e. What, if anything, surprised you about the events described in this film?
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