Question: In the chapter on Monetary Policy your authors go into quite a bit of detail about Federal Reserve policies during the recession of 2007-2009 (toward the end of the chapter). Based on your reading of the chapter, tell me three things: First, exactly what did the Fed setting the Fed Funds Rate have to do with housing prices early in the decade of the 2000s? Second, how did housing prices (first increasing and then decreasing) create the recession itself? And third, what did relaxed lending standards (on mortgages) have to do with this phenomenon?