What would happen to the standard of living in the United States if people lost faith in our financial markets? Why?
Solution
In one line - It would be difficult for firms to raise capital. Thus, capital investment would slow down, unemployment would rise, the output of goods and services would fall, and, in general, our standard of living would decline.
If people lost faith in the safety of the US. financial institutions the standard of living will fall drastically, thereby becoming a third world nation. It will has a dominant effect starting with high unemployment and lower productivity, since investors will not have place to invest, and investment bankers and other organizations who need capital will not get funded, causing businesses moving to other nation or simply closing their doors. Making credit crunching the other of the day. Home buyer gets no money to purchase a home. No money to buy car, etc. You can go on and on, until people began to literally run away from the US. The US. financial institutions is the major pillar of our American Dreams. The destruction of our market system will probably destroy our way of life.
The world lives and dies by America\'s financial institutions and economy. They are what keep our inflation down and markets up. They have as much impact as Americans do. So it will have ripple or snowball effect on world financial markets.
.
What would happen to the standard of living in the United States if pe.docx
1. What would happen to the standard of living in the United States if people lost faith in our
financial markets? Why?
Solution
In one line - It would be difficult for firms to raise capital. Thus, capital investment would slow
down, unemployment would rise, the output of goods and services would fall, and, in general,
our standard of living would decline.
If people lost faith in the safety of the US. financial institutions the standard of living will fall
drastically, thereby becoming a third world nation. It will has a dominant effect starting with
high unemployment and lower productivity, since investors will not have place to invest, and
investment bankers and other organizations who need capital will not get funded, causing
businesses moving to other nation or simply closing their doors. Making credit crunching the
other of the day. Home buyer gets no money to purchase a home. No money to buy car, etc. You
can go on and on, until people began to literally run away from the US. The US. financial
institutions is the major pillar of our American Dreams. The destruction of our market system
will probably destroy our way of life.
The world lives and dies by America's financial institutions and economy. They are what keep
our inflation down and markets up. They have as much impact as Americans do. So it will have
ripple or snowball effect on world financial markets.
