One thing about the required reserve ratio in relation to the Great Recession is that a wide number of banks failed due to the economic travails that came about. Indeed, many banks were completely eviscerated while others were held in receivership and were gobbled up by the remaining banks. Beyond that, banks had to under go "stress tests" using revised fraemworks and tests and even the surviving banks were subjected to that. Indeed, one of the factors that would dictate the results of these tests would be how much the bank has in reserve from a ratio standpoint and what it could or should be to help the bank survive economic problems. Recessions like the Great Recession do not happen often. That recession was the worst one since the Great Depression which happened in the 1930's. The latter of those two crises proved, though, that having banks fail on a wide scale can be very damaging to the economy to the point where runs occur on banks and the financial system in general becomes rather unstable. The Great Recession was not nearly as bad as the Great Depression and the banking system weathered the storm. However, the Federal Reserve and the financial regulatory framework that existed in the last generation (but did not exist in the 1930's) is one of the main reasons why (Tarver, 2017).
When taxes are lowered, the general effect is that people and businesses spend more. What in particular they spend their money on matters as it might be something that is fleeting and temporary or it may also be something more enduring and investment-worthy. There is also the question of whether a lot of the people involved will just use the cash infusion to "catch up" on expenses and bills or otherwise sock away money for a rainy day. Regardless, the overall goal of the cash infusion is to get people to spend and consume and investment-type spending is much more desirable over something that is a "one shot" deal. Businesses in particular are eyed and watched when it comes to taxes. Tax cuts are designed to get people to expand and hire. However, some businesses will just store and hold the money to build up their stock of cash. Such behavior is not the goal of the tax cuts, for obvious reasons. Even so, businesses might be hesitant to spend and invest when the economic outlook is less than stellar (Samwick, 2016).
Regardless, more spending typically means more demand and that is often the entire reason why the tax cuts are done in the first place. Government spending is seen as another way, albeit inferior, to do the same thing. After all, the building of roads and bridges incurs demand but that money is typically coming from taxpayers and finding the necessary funds without incurring debt or raising taxes can be a challenge. This is precisely Keynesian spending is often criticized in comparison to private sector endeavors. Even so, increasing demand in any way is typically a good thing. The more spending there is, the higher the gross domestic product (GDP) typically is and the same is typically seen with employment. More spending at stores due to tax refunds or cuts means more people needed to man the registers…
Banks in India are required to provide 40% of their net credit to other sectors like agriculture, retail trade, small scale industries and business.Net assets of the banking sector are held by private banks which holds 18.2%, 75% by public sector banks while the 6.5% are held by foreign banks. China China is the largest economic powerhouse of the BRIC countries by both population wise and GDP. It had an estimated
Economy The current state of the U.S. economy is that the unemployment rate as of April 2012 is 8.1% and the consumer price index was flat for that month (BLS, 2012). The first quarter improvement in the GDP saw an increase of 2.2% (BEA, 2012). The current interest rates are rock bottom, at 0.15% for six months, 0.19% for one year, 0.84% for five years and 1.98% for ten years. Five years
Economy Based on the information provided by the St. Louis Fed, the GDP indicators for the U.S. are as follows. The real GDP growth is at 3%. The trend for this indicator is upward, as it has increased steadily over the past four quarters. Real GDP growth was on a downward slide for all of 2010, however, bringing it to a very low level at the end of the year, which
Economy has been showing slow, but steady improvement. I expect that it will continue on this pace for the next three quarters as a result of projects that have been made for the unemployment rates, GDP growth, and inflation. The rate of unemployment has steadily decreased with the rate being 8.2% for March 2012, which was a minor increase over February's rate of 8.3%. The rate in November had been
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Economy of Colonial America Brief chronology of the initial economic developments of the colonies Jamestown, Virginia colony was first to show signs of economic growth Massachusetts Bay colonists buy corn from Indians Literature generalizations and postulations on economy of colonies Puritanism may have helped shape the capitalistic society to evolve The strength of the British Navy altered colonial approach to economic growth Colonial farmers' efforts were more towards self-sufficiency than wealth Rate of Economic Growth in colonies Colonial economy