Readers Question: Will an extra $20 billion per year spent on housing have the same impact on the economy as an extra $20 billion spent on interstate highways? It depends on the state of the economy. At the moment, 2008, one of the biggest threats to the US economy is falling house prices. Data released …
Readers Question: Use the ideas and theories you have encountered in your study of the macroeconomic business environment to assess the possible impacts on China of holding the Olympic games in Beijing in 2008. The Olympic Games will effect the Chinese economy in the following way. Increase in Tourism. This is a short term effect …
Readers Question: What do you think would happen if all depositors of a bank requested their deposits? The Banking would probably collapse – unless it could secure unlimited funding from a Central Bank or other banks. If a bank has deposits of £10billion. The bank will keep perhaps 1% in liquid assets (i.e. cash that …
The government has announced that the National Minimum wage will rise to £5.73 for workers over 21 – by the end of 2008. This means for a worker on a 40 hour week, their take home pay will be £229 per week. This also attracts top up benefits from the government in the form of …
Readers Question: To what extent can the subprime crisis affect the global financial market? The subprime crisis refers to the rising number of defaults on US subprime mortgages. Basically, US mortgage companies sold a lot of inappropriate mortgages to people on low income and poor credit histories. Rising interest rates, and falling house prices are …
Readers Question: Does mortgage equity withdrawal enhance economic growth? There is good evidence that mortgage equity withdrawal can lead to higher levels of consumer spending and economic growth Definition of Mortgage equity withdrawal – Mortgage equity withdrawal occurs when homeowners remortgage taking out bigger loans to take advantage of rising property values. Suppose you bought …
Readers Question: What are the effects of the economic decline in America to the country of Vietnam? If the US economy entered into a recession the main effects on other countries would be: 1. A decline in exports. American consumers are a key component of world trade. If there was a decline in exports to …
Readers Question: What the benefits and the negative effects of reducing all taxes? I wrote an Essay on the advantages and disadvantages of tax cuts The idea of cutting all taxes is key element of libertarian politics. Cutting taxes is often a mantra repeated by conservative parties, although in practice, they usually find it more …