Question

Saving, Investment, and the Financial System_ Ask FRED Let's take a look at financial intermediation and the financial crisis and recession of 2007-2009. The accompanying graph illustrates the series All Sectors; Total Loans; Liability. This series reflects all the lending in the U.S. other financial intermediaries. The series increases quite smoothly, rising almost without exception every single year from 1945 to 2008. In the third quarter of 2008 the series begins to drop tremendously, and in an unprecedented way-this is the hnancial crisis 28,000,000 Q3 2008: 24,222,689 24,000,000 20,000,000 16,000,000 12,000,000 8,000,000 economy from banks and all 4,000,000 1950 1960 1970 1980 1990 2000 2010 950 Source: Board of Governors of the Federal Reserve System (US)

Answer 1

a. From the given graph it appears that lending curve of Federal Reserve System in US economy was $4,00,000 million in the year 1950 that stood at the $28,00,000 million in last quarter of 2010. The total lending amount in the third quarter of 2008 was

$24,222,689 million