The focus of this question is on the US financial crisis of 2007-2008.

i. Explain clearly how each of the following parties: the mortgage borrowers, the financial institutions and the US federal government were at faults in the lead-up to the financial crisis of 2007-2008.

ii. Discuss the following claim: "On the surface, the global financial crisis (2007-08) seems to be driven by sub-prime mortgage debts. However, this is only the tip of the iceberg. The crisis is really about the banking sector going rogue. To be specific, it is about the fact that single individuals and entities (even the bankers themselves) were no longer able to fathom the complexities of products created in high finance".

iii. Discuss in details the policy responses by the US government and the US Federal Reserve (Fed) to the financial crisis.

iv. Evaluate the impacts of those policy responses on the US economy.

v. What should we do to ensure such a crisis will not happen again?