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Consumer Borrowing -- Spending an Economy Out of a Recession
The 'answer' provided by consumer borrowing and spending during recessions and even depressions revolves around the classical, microeconomics 'answer' to what seems like an economics paradox. Namely, how does one stimulate the economy into a state of recovery, when one is faced with consumers who have less money to spend on basic goods? Consumers who may be unemployed are understandably cautions about their economic future, so how does one 'give' them money to spend and encourage producers to produce.
Neo-classical or naturalistic theories of economics have tended to stress the need for the Federal Reserve Bank to lower the interest rate. This makes it cheaper for consumers to borrow money from banks, less punitive for consumers to use their credit cards to make purchases with money they do not have at the moment, and it also gives consumers an incentive to purchase large, durable goods like appliances and automobiles. The expected rational of lowering interest rates is that consumers would have to take out loans to buy such goods anyway, so why not take out a loan when the rate...
Thus, making educational loans more available is a good idea during times of economic recession, as this results in students possessing more money to finance their education, and to survive times of economic limitations during their studies and also in terms of a recession-gripped economy as a whole.
Keynesian economic theory often takes more of a 'macro' view of economic downturns. It suggests that when times are bad, even if interest rates are low, often people are still too fearful to spend money. During a recession, people want to hoard money, causing the economy to constrict still further. This results in still more layoffs and economic limitations, as factories close and more workers are laid off -- workers with less ready money to spend, and less willingness to make use of available credit. Thus, the federal government under such an analysis, ought to employ more workers, spend to a deficit, and increase consumer confidence and…
What needs to happen is that economic stimulus aimed at savings and investment, not necessarily nationalization of financial institutions, needs to occur. There is a difference, and with nationalization there is the assumption of risk by a government which will naturally be one of the most risk-averse, and therefore unable to capitalize on economic growth mindsets there are. A financial strategy of seeking to infuse greater levels of trust
Macroeconomics Government borrowing is too high and interest rates are too low in many countries; fiscal stimulus does not work and cheap money leads only to inflation. Explain and discuss the various caveats of this macroeconomic problem and what policy measures will you suggest and Why if you are hired as a Junior Policy Advisor in an Advisory Board of Economists in one such country including Canada? Use economic theory, policy,
This economic indicator can be used to determine inequality within a given region or area. It can also be view the capacity for individuals within a particular nation to consume b. Rate of Value- $41,560 c. Source of Information- "Per Capita Personal Income U.S. And All States." Per Capita Personal Income U.S. And All States. Bureau of Business & Economic Research, 12 Oct. 12. Web. 02 Feb. 2013. d. Date of information-
Milton Friedman: Journey From Past to Present Milton Friedman, the world's famous economist was born in 1912, in a poor Jewish Immigrant family who shifted to Brooklyn in the late 1980s. After completing his public school studies, he joined Rutgers University in 1928 (Friedman and Friedman 1998, p.25-27). During his early study in the field of economics, he was continuously in contact with the theorists like Mitchell, Burns and Kuznets; therefore he
fiscal and monetary policy. On the most basic level, the primary difference between fiscal and monetary policy is that fiscal policy pertains to the actions of the federal government designed to influence the national economy through government spending and taxation while monetary policy refers to the actions of the central bank to govern the money supply. Tight or restrictive monetary and fiscal policy is used to curb inflation; a liberal
Tassal Group According to the 2014 Annual Report, Tassal recorded a decline in revenues for the 2014 fiscal year. However, it improved the net income and EPS, so the performance was not all bad. The company was able to lower its gearing ratio as well, and increased its net assets. Thus, performance was mixed, but there is still concern about the declining revenue. Opportunities Since revenues are one of the biggest problems that