The Economic Recession Of Italy

The Economic Recession Of Italy
Italy is a country governed by a Constitutional Republic and has a diversified industrial economy
with developed infrastructure. The economy consists of a vast majority of small and medium sized
businesses, with few large corporations; and according to the United Nations, citizens of Italy enjoy
the 26th highest HDI (human development index), indicating that the country overall is healthy. And
while Italy is the 8th largest economy in the world by GDP, at $2.129 Trillion, its economy has been
sluggish since 2000 with real GDP growth rate of less than 1.5% every year, and shrunk almost 7%
between 2007–2011. The country has seen its debt increase from 113 to 132 (% of GDP), as a result
of an increase in doubt over the government's ability to manage the economy. The Italian
Government needs to enact fiscal reform to erase the need for deficit spending, increase the
country's growth rate, and advance their economy in the long run. The global economic recession of
2008 shook economies all around the world. Some of the largest countries saw a massive reduction
in their GDP, and Italy saw its economy shrink 3%. Italy still hasn't recovered from the hit it took in
2008, and it is still causing problems for the country. Italy's debt actually isn't their problem, but it is
the root problem. Italy has carried debt to GDP ratios well above 100% for over 20 years, but only
now are they having serious economic issues. The real problem has been GDP growth. Back in the
booming 1990's
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The Causes and Effects of Global Recession.
INTRODUCTION
Here a definition a recession as well a global recession is mentioned. Some causes and effects has
been listed. Due to recession occurring, I have identified the effects of recession based on Tesco.
The causes and effects of global recession.
Global financial crisis, increasing for a while, began to show its results in the mid of 2007 into
2008. Worldwide stock markets have subsided, financial institutions have dropped and governments
in even the richest nations have had to develop packages to assist their financial organizations.
Recession is defined as a slowdown of activities in the economy over a time. The major effect of
recession is Inflation as well as currency crisis. A decrease in income may be another ... Show more
content on Helpwriting.net ...
A decrease in world GDP occurred in many countries, specifically in developing countries. Imports
have also declined significantly in importing countries. This was obvious in countries such as China,
Taiwan, Mexico, Egypt and Russia. it was stated that GDP fell to 3.8% in the U.S. The impact of
recession on employment may not be felt for some time. Investigation in Britain shows that low–
skilled, low–educated workers and the immature are in a weak position to unemployment in a
downturn. It took Britain five years for unemployment to go back to its initial levels. From 2000 to
2003, the Federal Reserve lowered their target rates. They then raised the funds rate significantly
between July 2004 and July 2006. This added to an increase in number of years to the adjustable–
rate mortgage rates and made it more expensive for homeowners. As a result, this may have also
contributed to the deflating of the housing bubble. Gross Domestic Product declined at an in the last
two years in the United States. When GDP collapses, economic growth will also plunge. This is as a
result of fewer goods being manufactured and therefore the rate of exports will reduce. It is said that
when exports decrease, it will not have sufficient funds to accommodate any growth in the economy
what so ever. As a result in the decline in GDP, employment rate will sooner or later begin to drop.
As a result of the credit crunch, consumers have less purchasing power therefore

Impact of the Recession on Construction Contractors
THE IMPACT OF THE GLOBAL FINANCIAL CRISIS ON THE CONSTRUCTION INDUSTRY
JANUARY 2009
INTRODUCTION
The current crisis in the world's financial system has left the construction industry facing its
toughest challenges for a generation. Salaries are falling; job cuts are predicted to reach 400,000 in
England alone; and the impacts look set to get much worse before they get better.
No country is immune from the impact of this and the UK, and much of the rest of the world, is
already in, or about to enter a recession. Even buoyant construction markets such as the United Arab
Emirates (UAE) are starting to feel the effect, with construction growth rate expected to slow from
20% to 15% in 2009 (Al Mal Capital). The United Nations (UN) ... Show more content on
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The fiscal mitigation measures that were recently announced by the Chancellor (Pre–budget
statement, November 2008) were not sufficient to address the underlying loss of confidence facing
all UK businesses (and people).
More innovative ways could be investigated by Government to help the industry survive, such as
providing credit insurance; relaxing bonding requirements on public projects; setting up project
bank accounts; and providing tax breaks/concessions for sustainable construction R&D. At present,
the latter has effectively ground to a halt largely as a result of the deeply entrenched uncertainty that
abound.
Jobs & Loss of Skills
Almost 400,000 jobs in the construction sector in England could be lost over the next two years
(assuming GDP shrinks by 2.2% in 2009 and rises by 0.75% in 2010). It is predicted that the worst
affected area will be London, where 23% of workers are expected to be made redundant (Public and
Corporate Economic Consultants for the Local Government Association).
On the other hand, Eastern Europeans are responding to the downturn in the market by returning
home, and this has eased the severity of the job situation in many instances.
Given the forecasts for construction output in 2009, it could be assumed that jobs in the public

sector may offer more security than those in the private sector. This reinforces the need for
Government to establish how an accelerated public spending package will be

Economic Policies And The Great Recession Of 2008
Demand–side policies and the Great recession of 2008
Recession is a term that looms over any society at some point or another but what does recession
mean for the economy, in short it is an economic decline. This essay will examine the meaning of
recession and will discuss the fiscal and monetary policies that are used to pull economies out of
recessions. The great Recession of 2008 will shed light on how these policies were successful at
restoring economic growth and reducing unemployment.
The economic meaning of a recession is that the gross Domestic Product (GDP) has declined for
two or more consecutive quarters. Unemployment rises, housing falls, stocks fall and the economy
is in trouble. Whenever the government sees that the economy is entering a recession it is important
for it to act. The U.S acted in two ways during the Great recession of 2008 through fiscal and
monetary policies. Renaud Fillieule identifies that " Monetary and credit expansions have been the
main tools used by the U.S. government and central bank to try and recover economically from the
Great Recession of 2008" (Fillieule r, Pg. 99 2016). These Keynesian policies are debatable among
economist, none the less they were implemented and put the U.S on the road to recovery.
Fiscal policies or government spending and tax cuts were implemented. ... Show more content on
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The U.S government implemented policies that would adhere to the Keynesian model that suggest
"that it is the responsibility of the government to help stabilize the economy" (Keynesian). Key
actions the government and the fed took was quantitative easing, the stimulus and recovery act
which were approved in 2009. Though the US has not completely recovered from the recession the
government did effectively stabilized our

The Recession Of The United States Recession
Recession is termed as a period of temporary economic decline during which trade and industrial
activity are reduced, generally identified by a fall in GDP in two successive quarters. Based on the
complete recession that took place few important points that I could gather in specific considering
each type of recession are listed below. How it took place? Causes for it and what impact it had on
the audience. Let me discuss about this in brief.
The recession of 1937–38 is usually known as "the recession at intervals Depression." It came at a
time once the recovery from the good Depression was aloof from complete and therefore the per
centum was still terribly high. In fact, it had been a fatal natural event to the recovery. Real value
fell 11 November and industrial production fell thirty second, creating it the third–worst United
States recession within the twentieth century (after 1929–32 and 1920–21).
The recession is usually attributed to a adjustment of business enterprise and financial policy.
Christina Romer (2009) has argued that it 's relevant to today's scenario as a result of it illustrates
the risks of a premature withdrawal of stimulant once the economy remains weak. But the recession
remains somewhat of a mystery as a result of the 2 most often mentioned causes – the reduction
within the business enterprise deficit and also the Federal Reserve's call to double reserve needs –
don 't seem to possess been powerful enough to get a recession of the magnitude seen.

US Housing Bubble: Greater Recession
This financial crisis and bursting of the US housing bubble prompted a wider recession. Due to the
credit crunch, there was less available credit for consumers and businesses. There also began to be
restrictions on lending– since banks went bankrupt there was a reduction in bank's lending in the
first place and bank lending went down to just over $10 billion. This resulted in less money for
businesses to invest and consumers to spend. Therefore, there was a sharp reduction in consumer
spending in the economy "credit rationing". (6) The reduction in the money spent in the economy
meant there was fewer goods needed to be produced as there was less buying. This meant
production of goods decreased therefore resulting in less need for workers.

An Analysis of Peter Coy's 'The Great Recession: An Affair...
In his article "The Great Recession: An Affair to Remember", Peter Coy asserts two things. The first
is that the great recession has gone on longer than necessary as the result of faulty fiscal and
monetary policy; and the second is that the Great Recession will eventually end with a boom in the
US economy.
The article covers a number of key concepts in macroeconomics. The first is the idea of the
recession, something that Coy discusses at length in the article. We notes that the recession cam e as
the result of a real estate bubble that stoked consumer spending. The author notes that the recession
ended in 2009 when the economy stopped contracting, but that growth since then has been slow and
as a result the economy is below the trendline, so it is underperforming the level where it should be.
The author does not note if that trendline was adjusted for the bubble or if it accepts the bubble as
being a reasonable contributor to the trendline while the recession is not.
The US economy is in a state of monopolistic competition in most industries, where companies
compete for consumer dollars based on different types of differentiation. Consumers are willing to
spend on differentiated products, and their spending patterns are in part dictated by the abilities of
companies to sell attractive goods at attractive prices. The main driver of demand for the US
economy during the bubble was consumer spending. It was consumer spending that declined with
the recession, since the

Global Recession on Morocco's Economy
TOPIC
a) Analyse the effects of the global recession on Morocco's economy. b) Discuss what action
Morocco has taken to reduce the adverse effects of the downturn c) In your view, does the downturn
offer any positive opportunities for Morocco?
Table of contents
Introduction 4
1. The effects of the global recession on Morocco's economy 5
1–1 The impact of the international financial crisis on Moroccan financial economy 5 1–2 – The
Moroccan economy facing crisis 6
2. Actions taken to reduce the adverse effects of the downturn by Morocco 7
3. Does the downturn offer any positive opportunities for Morocco? 9
Conclusion 11
References 12
Introduction
The international financial crisis has largely been ... Show more content on Helpwriting.net ...
"Some foreign investors in the place could liquidate their position if they are affected by the crisis.
But none of this has been reached, "said the director of Project Financing in BMCE Abdellatif
Nasserdine.
The only impacts that the crisis could have on the place of Casablanca are psychological. The
mistrust that has plagued the world in relation to real estate assets could be extended to Moroccan
operators. Several reasons explain the remoteness of the international crisis in the Moroccan stock
exchange

Moreover, the Moroccan banking system is composed of mainly Moroccan–owned banks (BMCE,
BCP, Attijariwafa Bank) which control 70% of Morocco's banking market, and majority foreign–
owned banks (SGMB, Credit Du Maroc, BMCI) that share 30% of the Moroccan banking market.
Recall that BNP Paribas owns 63% capital in BMCI, Societe Generale control with 51% of the
SGMB and Credit Lyonnais has majority in Crédit du Maroc with 52% of capital. Yet according to
the financial press, many French banks are affected by the crisis:
– The Societe Generale has not yet digested the loss of 5 billion of EURO attributed to its trader. Its
shares have lost 50% of their value.
– The Crédit Agricole difficulties through its Calyon business bank wich will cut 500 jobs.
In Morocco, the economy is rather well behaved throughout the years 2008 and 2009, the greater
control

Consumerisms In Recession
The recession that will be focused on is the most recent 2007–2009 recession. This recession cost
the US labor market 8.4 million jobs. Job loss is one of the hardest things to recover from after a
recession. Stocks go up, consumers continue with their purchases as some of them release times are
getting better. However the economy is a rollercoaster, it goes from being at the top of the track with
stocks high, and jobs growing each day to slowly descending to a crash, or in the reference of the
rollercoaster descending off of the hill that it climbed to. Consumers in today's society see a
recession as a new trend, and the way they spend reflects as such during this time. Consumerisms in
a recession are a foundation for recovery; the spending ... Show more content on Helpwriting.net ...
Previously society experienced the rise and fall more sporadically, however today, the recessions are
so close together that it is becoming more and more difficult to analyze the space in between. In the
recessions of 1974–1975 the government leaders, who took the iniative to alert people that in the
coming year they would experience a downturn, foresaw the recession. This recession was recorder
to be the worst since the 1930's, for an accumulation of reasons; the largest factor being the
"American aggression in the Vietnam War". Paul Volcker was a critic on the American dollar and
the American's involvement by stating "Our failure to face up to the financing of the Vietnam war
[was] one key factor in setting up the subsequent inflation". This is a statement that could be used
for any recession. Simply by changing the war, and the point in which the quote could be referring
to, there is the leading cause to a recession. However, the war would then affect the natural state of
the economy. Without the war the government would have used the money elsewhere, would have
gone where it needs to go, or would the government find another cause to invest in? The questions
of government spending follows a dangerous line of whether the money spent in one place was
worth it. However, with the investment in war, it puts a deficit on the country, which leads

The Great Recession of 2008
Abstract
A recession is full–proof sign of declined activity within the economic environment. Many
economists generally define the attributes of a recession are two consecutive quarters with declining
GDP. Many factors contribute to an economy's fall into a recession, but the major cause argued is
inflation. As individuals or even businesses try to cut costs and spending this causes GDP to decline,
unemployment rate can rise due to less spending which can be one of the combined factors when an
economy falls into a recession. Inflation is the general rise in prices of goods and services over a
period of time. Inflation can happen for reasons such as higher energy and production costs and that
includes governmental debt.
Great ... Show more content on Helpwriting.net ...
However, Sweden and the United States are also significant trading partners, with the U.S. spending
less and losing more jobs. As demand fell so did Sweden's export contribution to its GDP, thus
spiraling Sweden into a recession. Key interest rates began to fall in Sweden same as in the United
States due to the global financial meltdown. "As the demand for loans diminish, interest rates tend
to decline as well" (Schiller, 2010).
Dissimilarities of U.S. Recession and Other Nations
Although, Japan and Sweden had few similarities with those of the United States during the Great
Recession, there were dissimilarities that displayed the U.S. failure to achieve full employment GDP
and other factors. Japan's unemployment rate of about 4% opposed to the U.S. unemployment rate
of close to 10%. Even the financial debt to GDP ration is an advantage, and debt in the private
sector has not increased unlike the U.S. and European countries, (Time, 2009). In addition, since
Japan is a huge exporter and with the U.S. demand going downward, the international balances and
growth declined especially as the dollar value dropped and the yen surged. Unlike the United States,
Sweden took a double hit as weak international demand for its products and interest rates at home –
GDP contracted by 0.4% down, according to Sweden Real Estate (2010). Sweden's home prices
keep rising while the U.S. home prices had plummeted.

The Great Recession And Financial Crisis
The Great Recession or Financial crisis started in late 2006 beginning of 2007 when the subprime
mortgages in the united states started to exhibit at a growing rate of mortgage defaults. Which led, in
late 2006, to a decline in US housing market after exponentially higher growth. Many homeowners
witnessed how the assets, (main source) devalue. By mid 2007, the housing market started showing
an unusual default on home loans. By 2008, the U.S. witnesses and live the worst financial recession
since the end of WWII.
In 2008, a number of Banks, Financial Institutions and Non–Financial institutions failures sparked
Financial Crisis or as some economist call "The Great Recession" that efficiently froze the entire
world Financial institutions, ... Show more content on Helpwriting.net ...
The Financial crisis has its roots in real estate and the famous sub–prime lending crisis. In 1990,
during president Bill Clinton administration, Commercial banks and residential properties witnessed
their values increase for almost a decade. Increases in the house market coincide with the lowering
of interest rate and lending standards to unqualified borrowers accepting them to take out mortgages
whereas at the same time the government deregulations mixed the lines between traditional financial
institutions and mortgages lenders. The real estate loans were distributing through out the financial
& Banking system in the shape of CDOs and other complex derivatives in order to scatter or spread
the risk; however, when home values stopped to rise and homeowners flopped to keep up with their
payments and banks were forced to foreclosure their homes.
The financial crisis from 2007 to 2009 may well be called the financial engineering and corporate
authority gone wild. The birth of the financial crisis can be draw back to the property asset bubble in
the US between 1997 and 2006. This financial bubble was enabled by a badly regulated subprime
mortgage industry and the assumption that property prices would continue to

The Government Should Respond To The Great Recession
A recession is a period when there is negative growth in GDP, for at least two consecutive quarters
of a year. A recession is a period when, after reaching a maximum level (the peak), business activity
starts slowing down by the time it reach the lowest level (the trough). In economics, a recession is a
business cycle contraction, a general slowdown in economic activity. Macroeconomic indicators
such as GDP, employment, investment spending, capacity utilization, household income, business
profits, and inflation fall, while bankruptcies and the unemployment rate rise. ("Recessions," n.d.)
Recessions often take place when consumers are spending habits begin to decline; which causes an
issue with the supply of the economy. The Government could respond to the recessions by
implementing expansionary macroeconomic policies, such as adjusting the money supply,
increasing government spending and decreasing taxation. However, depression is a phase when such
effects are deeper and more prolonged than a recession. ("Increased ... Show more content on
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Its length characterizes a depression; by a substantial increase in individuals becoming unemployed;
the availability of credit has a limit due to the financial crisis. Consumer purchases decline, and
manufacturer's production and investments also decrease. A substantial amount of debt begins to
increase of which affects the amount of trade and commerce. A deflation in prices, financial
institution failures is also commonly related to the elements of depression that are not normally a
part of a recession. A fall in GDP of less than 10% Also, GDP consistently declines for more than
two years at a stretch; unemployment reaches the highest peak and general economic activity slows
down to the trough. There are economic stagnancy and almost zero prospect of a fast or immediate
recovery. All sectors of the economy suffer directly or indirectly from a

What Caused The Great Recession Of 2007 And 2009
Many factors directly lead and indirectly caused the great recession of 2007 and 2009. The financial
crisis happened because banks were able to create too much money to fast and used it to increase
house prices faster than wages. They increased the amount of money and debt in the economy.
Eventually, the debts became unpayable and the banks saw themselves in danger of bankruptcy
where people could not repay them and limited their spending. A downward spiral begins and the
economy heads into recession. Using the aggregate demand and aggregate supply model you can
see a decrease in aggregated demand, which causes a recession involving a decline in price level.
This caused less investment and consumer spending which then causes less demand and

Economic Recession
Economic Recession of 2007
William Mwangi
Class title and section
Professor's name
Due date of Assignment: 26th August 2011.
William Mwangi
Economic crisis Class
Professor's name
24th August, 2011.
Economic Recession of 2007: What caused it and what were the after effects? Can we predict
another major recession?
Thesis Statement: Although the recession that dates back in 2007 is still long and deep and surely
has shown some recovery, the potential that it will completely recover is still vague.
I. Causes of the 2007 recession
A. Inflation
B. Housing Prices
C. Oil Prices
– Recovery measures
A. Cutting Production cost
i. Caused unemployment
B. Increase Interest rates by the Federal reserves
i. ... Show more content on Helpwriting.net ...
Current Account Deficit," he explained that economic crisis has its background way back – a decade
ago, as the developing countries had modest trade and account deficit of which was financed by
borrowing from the rest of the world in order to invest more than save, bringing about financial
crisis i.e. they will be rich in future by constructing infrastructures but face recession in present.
Housing prices was another contributing cause to the recession. In the decade going towards 2006,
housing prices spiraled up by more than 25% due to high demand, decline in lending standards, and
low interest rates in the 2000s. Between 2000 and 2006 large number of borrowers took out
mortgages as they were lured by the prevailing favorable rates. This had the effect of fetching all
and sundry including those individuals with bad credit records. The Federal Reserve began to raise
fed funds thus interest rates cropped from 1.25% to 5.25% – a reasonable level to fight the inflation
level as well as overall loans between banks. Expensive repayment on loan had the effect of
softening housing markets since borrowing was costly.

According to Bernanke, "by August 2007, nearly 16% of mortgages were in default," (qtd. In Jones
6) this explains the advancement in the problem due to low housing prices that led to defaults and
further lowered housing prices even further in a vicious cycle. In addition,

The Causes and Effects of a Recession Essay
Average cost is total cost divided by total output at a specific point. For instance if 100 units are
produced and total cost incurred is 200 then average cost of one unit would be 2/unit. Whereas
Average revenue is calculated same as average cost however, instead of total cost we take total
revenue. Marginal cost is cost of producing one additional unit of output or in other words a rise in
total cost when output rises by one unit. Similarly marginal revenue is the rise in total revenue when
output rises by one unit. For instance, if total revenue generated by 100 units is 200 and for 101
units it is 201, then marginal revenue would be 201–200=1. Output/Sales Volume Total Cost Total
Revenue Marginal Cost Average Cost Marginal Revenue ... Show more content on Helpwriting.net
...
It can also be seen that when the marginal cost is lower than the marginal revenue, profit is
increased. When marginal cost is equal to the marginal revenue profit is maximized. After this point,
when marginal cost is above the marginal revenue, profit starts to fall. Therefore, profit is
maximized when MR=MC. In the above graph Y axis consists of amount whereas X axis represents
level of output. It can be seen clearly that at output level of 8, MC=MR (two lines cross over here)
which is the output where profit is maximized. Similarly as we extended the connector line above to
get the price (average revenue) this is 23.5 as in the table above. Profit: When MC=MR, profit is 84
which is the highest possible amount in current circumstances. Possible Market Structure: It is clear
from the above data that the firm is certainly not working under perfectly competitive market. In
perfect competition, firm cannot afford to sell at lower price. If elasticity is calculated at different
points, it can be seen that elasticity is decreasing from top to bottom but still the demand is very
elastic. For instance at 9 units elasticity is 5 (in absolute terms) which is still much greater than 1
which means that it can be monopolistic competition or oligopolistic environment. But chances of
monopoly are less because in monopoly demand is usually inelastic. However, to decide between
oligopoly and monopolistic

Government Reactions during the Great Recession
Monetary Policy and Fiscal Policy: Government Reactions during "The Great Recession
Monetary policy and fiscal policy can greatly influence the US economy.
Keynesian economics says, "A depressed economy is the result of inadequate spending. Keynesian
argued that government intervention can help a depressed economy through monetary policy and
fiscal policy. The idea established by Keynes was that managing the economy is a government
responsibility.
Monetary policy uses changes in the quantity of money to alter interest rates and in turn affect the
level of overall spending. The object of monetary policy is to influence the nation's economic
performance, as measured by inflation, the employment rate and the gross domestic product, an
aggregate measure of economic output. Monetary policy is controlled by the Central Bank and
influences money supply.
Fiscal policy uses changes in taxes and government spending to affect overall spending and stabilize
the economy. The objective of fiscal policy is the governments' typical use fiscal policy to promote
strong and sustainable growth and reduce poverty. During periods of recession congress has the
option to decrease taxes to give households more disposable income so they can buy more products.
Therefore, lowering tax rates increases GDP.
The steady growth of core inflation in late 2007 and the first half of 2008 appear to suggest that the
Fed's applied discretionary powers to avoid a tightening. In 2009 the feds needed to be

Characteristics Of A Recession : The Great Recession
The Great Recession was a hard time for most of the country. The economy had dropped so low that
it was the largest drop since the Great Depression. People were not only losing their jobs but also
their homes due to the fact that they could no longer afford their payments. People cut back on
spending all together and in turn that affected a lot of businesses. Characteristics of a recession are
defined as by the U.S. Bureau of Labor, "A general slowdown in economic activity, a downturn in
the business cycle, a reduction in amount of goods and services produced and sold" (U.S. Bureau Of
Labor). This hard time for millions of Americans lasted for 18 months and it created a lot of damage
and that is why it has been deemed 'The Great Recession'. Our country may not be considered in a
state of recession any more but people are still being affected by this and are slowly trying to be
back on their feet.
Starting back from the very beginning, before the crisis hit rock bottom, the real problem started in
the late 1990's when the government stressed the importance of national homeownership. People
were starting to take out loans and purchase homes in the early 2000's because the qualifications
weren't as strict as they had previously been. According to an article on businessweek.com, "It
promoted paper–thin downpayments and pushed for ways to get lenders to give mortgage loans to
first–time buyers with shaky financing and incomes" (Coy). This had a lot to due with the fact that

Essay on Analysing the Recent Economic Recession and Its...
The business cycle is the short–run alternation between economic downturns and economic upturns
(Investopedia n.d.). A recession is an economic downturn and happens in every country and some
recessions are worse than others and the output of GDP and employment are falling farther and
faster. The great depression lasted from 1929–1933 and was a deep prolonged downturn in the
business cycle before a recovery/expansion of the business cycle occurred and GDP and
employment started to rise (Krugman & Wells. 2012). The next recession lasted from 1981–1982
and was comparatively smaller than the first (Krugman & Wells. 2012). More recently in 2001 a
slump in the economy was noted and was followed by the great rescission of 2007–2009 (Krugman
& ... Show more content on Helpwriting.net ...
An examples of the circular cash flow model is demonstrated in figure 21–6.
"Firms produce output and then pay income to households and households then use this income to
buy goods expenditure" (Pettinger. n.d.).
Unemployment Rate & Labor Force Participation Rate Labor force is the amount of people who are
employed and currently have a job and the people who are unemployed and currently do not have a
job (Krugman & Wells. 2012). The labor force participation rate is calculated with people sixteen
years of age and older that are employed, while the unemployment rate is measured by the percent
of the total number of people sixteen years of age and older who do not have a job (Krugman &
Wells. 2012). The United States assigns the Bureau of Labor Statistics (BLS) with the task of
tracking the employment and unemployment rate of the labor force in the United States (BOOK).
The BLS breaks down the unemployment and labor rate much farther than just how many are
working and not working and breaks the cart down to race, age, gender, and level of schooling from
no high school diploma to bachelors degree and higher for the year along with many other statistics
and ways to track the populations work force (U.S. Bureau of Labor Statistics. n.d.). The BLS
breaks down the labor force also by including discouraged workers, who are people that are not
working but could work and have given

Great Recession
During the great recession era that began in late–2007 and lasted until mid–2009, the labor market
took a major loss. The reasons that caused the labor market to plummet during this time frame were
due to unemployment, a decrease in income and lack of education. Despite the efforts from the
government to help as much as possible, the labor market had taken the worst hit and was at its
lowest since the last three decades. It is important for everyone to understand what a weak labor
market can result in. In this paper, I will discuss these findings and what impact they had on the
labor market to weaken it to such a low point. Before entering into details about these findings, I
would like to provide some information about the labor market. ... Show more content on
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Unemployment, the decrease in income and lack of education are all correlated with one another
and were the major things that weakened the labor market during the great recession. The lack of
education during this time resulted in many individuals to lose their jobs. Unemployment being at
all time high caused many individuals to go back to school so they could find jobs. When people
were unemployed, their household income declined as well. Inflation played a major role in
unemployment; employers could not keep workers due to the cost of business going up, so they let
go of the workers that did not have an education or low skill

2007-08 Recession
Causes of 2007–08 recession
The major causes of the great recession of 2007–8 were caused by the first subprime mortgages. The
Federal Reserve's failure to curb the unnecessary loans, taking too much risk, financial firms acting
recklessly, explosive mix of borrowing, missing a full comprehension of the financial system and
fissures in accountability formed the backbone of 2007–8 recessions. Moreover, during 2007–8,
many financial institutions lower credit standards to accommodate the large demand for loans
securities with an ill intention to create huge profits to share which greatly became a source for the
economic recession during the 2007–8 err. The international trade imbalances and lax lending
contributed to the high levels leading to recession. Consequently, the recession was caused by the
significant increase in savings that were supposed to be ... Show more content on Helpwriting.net ...
This move led to $700 billion bailout and bankruptcies resulting to declining of employment and
finally causing the economic recession.
Consequences of 2007–8 recessions
Unemployment
The recession of 2007–8 resulted in the great number of unemployment as illustrated previous by
the DKs curve that suggested an increase in unemployment leads to decreased inflation (Arnold,
2010). Many people become jobless as the banks and other financial institutions started focusing
over injecting money into the economy. This problem was to be corrected by reducing government
expenditure. By doing so many people lost jobs and employment was greatly reduced.
Decline in the housing market
The recession greatly affected the housing investments as housing slump was set off. The investors
were unable to flip their homes for a quick profit. Also, the adjustable rates of mortgages were
increasing making it hard to get a mortgage.
Collapse of financial

The Great Recession
The Great Recession of 2008 was the biggest global financial crisis that the world witnessed after
the Great Depression of the 1930s. Collapsing markets, failure of banks and drastic decrease in
international trade were just some key characteristics of the great recession. It became clear after the
collapse of the capitalist ideology enforced by United States that this was the end of America–
centred age of globalization (Lecture 2). This paper will compare and contrast the key
characteristics of the great recession and the great depression. It will also emphasize that the root
causes of the financial collapse of 2008 were first, unfavourable macroeconomic factors such as
increasing deficits in the current account of advanced countries and loose ... Show more content on
Helpwriting.net ...
Baldwin in his book, "The Great Trade Collapse", explains that the financial collapse was very
sudden and synchronized which increased its severity. The trade collapse in 2008 was not as severe
as the Great Depression, however, the fall was very quick as it took 9 months for trade to fall at the
same level which took 24 months in 1930s (Baldwin, Pg. 1). The gradual trade collapse was an
initial sign that a severe financial crisis is about to come as countries that were dependent on
commodity exports (oil and minerals) were hit the most which includes Canada as well.
Additionally, uncertainty about the future spread globally and as a result people began to delay their
unnecessary expenses. With consumption rate decreasing globally, imports and exports were
adversely affected as well resulting into decreasing GDP in US, European Union and Japan
(Baldwin, 2009). It can be concluded from the stated facts that the nature of the Great Recession
was widespread primarily due to the internationalization of trade. Capitalism, with its main concept
of globalization had made the great recession a global phenomenon since after the triumph of
United States in Cold War, capitalism was adopted as the new world order. The expansion of MNCs
and global supply chains which were created to reduce operational costs meant that disruption in
one country of operation would likely cause problems with associated subsidiaries in other
countries. Thus, the connectedness of the financial markets and trade contributed in creating a
synchronized and severe recession

The Great Recession Of 2008-9
The Great Recession of 2008–9 was the deepest and longest capitalist economic slump since the
Great Depression of 1929–32. The recent financial crisis is known as the "Great Recession" of
2008–9. Its downturn was sparked by the collapse of the US housing market. In 2006, the prices of
home began to rise and the banks began to encourage potential homebuyers to take out larger loans.
There were lower interest rates at the time, and this seemed like a good idea for most individuals
who were searching for a new home. Then, in mid–2007, the interest rates began to rise. The values
of the homes decreased and the amount of money a house was worth declined significantly. Many
homeowners were stuck with large loans, increasingly high interest rates, and a decreased price of
their home. Many homeowners went into foreclosure or were evicted. This eventually led to large
financial institutions and banks to become bankrupt, which lead to an overall fall in the US
economy. Stocks dropped, consumer spending declined significantly, and companies began to go out
of business (Athanasiu, 43).
This financial crisis has impacted the economy tremendously during that period. Businesses have
been drastically impacted, as have the lives of workers in the United States. Many articles have been
published about different aspects of the recession. One question that has not been completely
addressed is how the Great Recession has affected small business and unemployment rates. The
reason for addressing

What Are The Similarities Between The Great Depression And...
Introduction
The world has encountered two major economic slumps since World War I. The Great Depression
was the longest financial crisis witnessed by the modern world. It started at around October 29th,
1929 and lasted up to the beginning of the Second World War in 1939 (Temin 301). The great
depression was by far the worst and longest economic crisis ever recorded in modern history, until
towards the end of 2007. The next economic crisis that would be comparable to the Great
Depression occurred in the late 2000s, precisely between December 2007 and June 2009 (Roberts
1). It would be popularly referred to as the Great Recession. The Great Depression and the Great
Recession were undoubtedly similar in multiple ways. This paper aims at comparing these two great
economic crises by highlighting their similarities. This paper answers the question 'How similar
were the failures of the financial markets during the great depression ... Show more content on
Helpwriting.net ...
During the Great Depression, households had to keep up with increased rates both on income and
excise tax. The highest mark was at 79% in terms of marginal tax. Most Americans, however, lay
within the 50% tax rate (Cole, Harold and Lee 159). Entrepreneurship and capital intensive
investments were also greatly affected, with the government requiring more than half of any income
exceeding a set value. Due to the decreased investment by entrepreneurs, the joblessness problem
was further compounded. Similarly, the Obama administration recommended significant tax hikes,
planned for the future. Some of the items that the Obama administration had recommended were tax
hikes on included liquor, cigarettes, plane tickets, and soft drinks. Furthermore, the many tax breaks
that had been enacted under President Bush were discontinued. President Bush had implemented tax
cuts on capital gains tax, income tax, and estate

From Inactivity to Unemployment after the Recession
Many people have moved from inactivity into unemployment after the recession. Since the start of
the recession in 2008, more people have decided to re–enter the labor market with the goal of
finding a job. In the latest period of 2013, 523,000 people moved from inactivity into
unemployment. It has increased speedily since 2008. This could be because of the financial
pressures put on household because of the recession. (Dow Jones 2014)
Also, number of recent welfare reforms may have influenced such as changes to the conditionality
for lone parent income support and the replacement of incapacity benefit with support allowance
and employment. (Dow Jones 2014)
UK Monetary policy
Monetary policy includes using interest rates and other financial tools to affect the levels of
Aggregate Demand and consumer spending. In the UK, the objective of monetary policy is to keep
inflation within the target of CPI 2% +/–1. They also emphasize on other macroeconomic variables
such as unemployment and growth. (Tevgan Pettinger 2012)
The monetary policy in the UK is set by the monetary policy committee of the Bank of England.
They try to meet the inflation target set by the government. (Tevgan Pettinger 2012)
During the recession of 2008–2009, the Bank of England used 'Quantitative Easing' as part of their
monetary policy. This includes creating money electronically such as government bonds from banks
to buy assets. Deflationary pressures are avoided and an increase in the money supply is seen

The Great Recession in the year 2008
Recession 16Specifically, Freund (2009) defines global downturns as years when world real GDP
growth is (1) below 2 percent, (2) more than 1.5 percentage points below the previous five–year
average, and (3) at its minimum relative to the previous two years and the following two years.
1975, 1982, 1991, 2001, and 2008 Freund (2009) describes the evolution of world trade following
four previous global downturns. She finds that the size of the decline in world trade during these
episodes is almost five times the corresponding decline in world GDP. She also finds that, while
world trade growth resumes quickly following a global downturn, it takes more than three years for
trade to reach predownturn levels. Referance Freund, ... Show more content on Helpwriting.net ...
Later the same day, the Bank of America announced that it would be purchasing Merrill Lynch. Due
to the above factors, there was major instability on the global stock markets with major decreases in
market value between the 15th and 17th of September 2008. On the 16th September, the American
International Group (AIG), which suffered due to its credit rating being reduced, was helped by the
Federal Reserve which created an $85 billion credit facility to stop it from collapse. Over the next
two weeks, more banks failed and the two remaining banks–Goldman Sachs and Morgan Stanley
converted into 'bank holding companies ' so that they had more access to market liquidity.
Numerous plans were put forward with intent to solve the crisis and in the end President George W.
Bush and the Secretary of the Treasury announced a $700 billion financial aid package intented to
limit the damage that the previous few week 's events caused. The plan was received well by
investors on Wall Street and around the world. Read on On 28th September it was announced that
Fortis, a large banking and finance firm would be semi–nationalized with Luxembourg, Belgium
and the Netherlands investing over 11 billion Euros into the company. On Monday 29th September,
it was announced that the US bank Wachovia would be bought up by Citigroup (this

The Recession Of The United States
I. Introduction
Ever since World War II the United States has experienced many recessions. There have been many
terrible recessions that have hit this great country hard. What is a recession people may wonder? A
recession is a significant decline in activity across the economy, lasting longer than a few months. It
is visible in industrial production, employment, real income and wholesale–retail trade. The
technical indicator of a recession is two consecutive quarters of negative economic growth as
measured by a country 's gross domestic product (GDP). Although, the recession of 2001 wasn't a
dramatic and horrible recession, it was the end of the longest expansion our country had seen since
WWII. The expansion following the recession of 1991 was 10 years up until this recession of 2001.
Furthermore, this recession was difficult and was hard to deal with and overcome, because during
the time of this recession our country experienced 9/11.
II. Causes of the Recession
After the longest economic expansion in history, the U.S. experienced a recession in 2001. The
Recession of 2001 was relatively short, but still had its impact upon us Americans. Just like many of
the previous recessions our great country has faced, this one had many reasons as to why we fell
into a recession as well. Some of the reasons we experienced a recession in 2001 is, because of the
collapse of the dotcom bubble, the attack on 9/11, and a series of accounting attacks at major U.S
Corporations. The

2000 Recession
The early 2000s recession was a decline in economic activity which mainly occurred in developed
countries. The decline affect the European Union throughout 2000 and 2001 and the United States
during 2002 and 2003. The UK, Canada and Australia avoided the decline, while Russia, a nation
that did not experience affluence throughout the 1990s, in fact began to recover from said situation
Japan's 1990s recession sustained. This recession was predicted by economists, because the boom of
the 1990s (accompanied by both low inflation and low employment) slowed in a few parts of East
Asia throughout the 1997 Asian financial crisis. The recession in manufacturing countries wasn't as
momentous as either of the two preceding worldwide recessions. Some economists in the United
States object to characterize it as a recession since there were no two successive quarters of
pessimistic growth. After the comparatively placid ... Show more content on Helpwriting.net ...
economy in March 2001. A peak marks the closing stages of an development and the establishment
of a recession. The fortitude of a peak date in March is thus a fortitude that the development that
began in March 1992ended in March 2001 and a recession began [1]. The extension lasted almost
10 years, the longest in the NBER's chronology . According to the National Bureau of Economic
Research (NBER), which is the private, nonprofit, nonpartisan union charged with determining
economic recessions, the U.S. economy was in recession from March 2001 to November 2001 , a
phase of eight months at the establishment of President George W. Bush's term of office. However,
economic conditions did not assure the common shorthand definition of recession, which is "a fall
of a country's real gross domestic product in two or more consecutive quarters," and has led to some
misunderstanding about the procedure for determining the opening and finale dates of a

Essay On The Recession
Institutions have been affected by the recession. These institutions sort new opportunities for
making profit and sustaining their activities. One type of institution that has been greatly affected is
the university institutions. These institutions have been affected, as a result, of cutbacks in terms of
funding by the state government attributed to the recession that caused economic turmoil in the
country. These cutbacks by the government affects universities countrywide resulting to them
reducing their own spending and finding alternatives that would help sustain them. Nobody State
University is one such university that has been struggling to increase its revenue (Malcolm &
McMinn, 2013).
There are several options such institutions are ... Show more content on Helpwriting.net ...
However, this might not be the case because of the fact that the price elasticity of offering university
education services has a very low elasticity of –1.2. This figure means that price changes in terms of
tuition fee would have a small effect in the overall application of student in the university.
Therefore, it would be clear to say that an increase in the tuition fee would result in small change in
the level of enrollment which would not affect the overall revenue generated by the university, and
this would rule out the hypothesis stated before (Amacher & Pate 2013).
According to findings in other institutions, that have adopted this option, the increases in tuition fees
have actually raised the enrollment level of students in those universities (Kaminer, 2014). One of
the characteristics exhibited by this move of increasing tuition fees is that the overall number of
applicants for positions in the university will go down. However, universities counter this situation
by increasing the number of enrollments from the few who have applied spots in the university.
Therefore, the number of students actually ends up being high, and the institution increases its
overall revenue. There would be cases where the revenue remains the same such as the number of
students' applicants goes really low and so the institutions would try to offset this situation by
enrolling more. The situation could worsen if the pricing is wrong where they would charge more
but

The Great Recession Analysis
The Great Recession was financial down turn that happened from 2007–2009, largely because of the
housing market decline. The term recession refers to any significant decline in an economy that lasts
longer that a few months. Its beginning can be signified by two consecutive negative quarters of
economic growth. The great Recession caused many areas of the economy to struggle, one of the
biggest was the unemployment rate. In December of 2007 the unemployment rate was 5%. From
that point this number grew until it had reached 10% in October of 2010. Due to the unemployment
rates steady rise, the national output decreased.
The government created several programs to help the economy during the Great Recession. One of
the ... Show more content on Helpwriting.net ...
Soon after this bill was passed the Government got the first 250 billion dollars to start giving to
large banks so they could clear up their bad lending in the past and gain the confidence to lend
money once again. The ARRA was created to make and save jobs, and started working almost
immediately after signed. This bill helped the government to start using more public spending
instead of private. The implementation of this strategy would lead to the creation and saving of more
jobs. To also help Stabilize the economy the FED added more liquidity to the banking system,
conducted "stress Tests" of all the major banks, and they were constantly ready to support struggling
banks. By adding liquidity the Fed gave short term loans to banks, by using stress tests the FED
worked with banks to make sure they had enough resources to make it through the current recession
and ones to come, and finally by showing support the FED prevented a loss in confidence of major
banks. RGDP or Real Gross Domestic product is the total dollar value of all goods and service
produced over a period of time. RGDP relates closely to unemployment. If the unemployment rate is
high than the production will decrease and vise versa. This Graph shows an eventual close in a
recessionary

Questions on Economics, the Recession, and the Federal...
Part 8 – A recession is typically defined as at least two consecutive quarters of economic decline in
GDP. When this happens, unemployment tends to rise, personal income may drop, and the price of
goods and services become volatile. Most agree that it is impossible to eliminate recession in a
capitalistic economy, since it is so cyclic. Recessions may trim weak business and allow stronger
ones to survive by employing techniques that improve quality and service. Recession does not mean
depression; it simply means that there are peaks and valleys within the overall economic system.
Now that economies are more global though, these dips have a far more reaching set of
consequences. In most firms, however, recession may result in some lay–offs, but it also may mean
greater attention to sustainability, cost–cutting, and a more lean and strategic approach to the
individual product or service (Moffatt, 2009).
Part 9 – The Federal Reserve System was created in 1913 to act as the central bank of the United
States and to oversee the nation's monetary policy, regulate banking, and make financial systems
stable. Over the past two years, though, the Fed has faced serious challenges as it responded to
severe recessionary times. The TARP program was a new tool to provide capital to banks, as well as
new programs to stabilize money market mutual funds and short term paper markets. TARP and
TALF (Term Asset–Backed Securities Loan Facility) helped revive security markets and allow more

Great Recession Summary
The U.S. experienced a significant economic decline in December 2007. This was the Great
Recession. A recession is a huge drop in consumer spending that has a chain reaction of job lose,
and lower business income. It can be caused by an economic shock. And economic shock is when
products are priced more than their value. 8.8 million Jobs were lost within 2 years, February 2008–
2010. Unemployment was nearly 10% in October of 2010. Since 2012, GDP and employment has
made a very slow growth rate. The poverty rate increased to 12.5 % in 2007. Many economists and
even the Bureau of Economic Analysis had predicted the recession. The confusion aspect of it was
generally when the GDP lowers, one would assume a recession has/will begin. In May 2008, the
GDP was reported to be positive for the last two quarters. The problem was inflation as not being
taken in account. ... Show more content on Helpwriting.net ...
One included overprice of houses. There were many foreclosures during this time. Financial
conglomerates, investment banks, and insurance firms combined trading of mortgage derivatives
and etc. This system was known as the "Securitization Food Chain." It was a scandal, an inside job.
The Securitization Food Chain was a system of mortgage transfer that had 5 parts to it which
included the following: home buyer, lenders, investment banks, investors, and insurance companies.
This was also called the housing bubble and it practically tripled the price of homes and other real–
estate from 1999 to 2007. This big difference in price was because the American banks gave
uncontrolled credit to other companies and they played a role in this scandal. On December 30,
2008, the home price index had its lowest drop in history. The increase in foreclosure rates in the
U.S. made a crisis in August 2008 for the subprime, collateralized debt obligation, mortgage, credit,
hedge fund, and foreign bank markets. The bursting housing bubble was an awful effect on the

The Cause And Effects Of The Great Recession
The Great Recession was an economic recession that took place across the globe during the late
2000s. It was caused by the bursting of an $8,000,000,000,000 housing bubble. A housing bubble is
caused by a substantial increase in real estate property values to an unsustainable level until a limit
is reached where the market collapses. This led to less consumer spending, a collapse in business
investing, and eventually an increase in job loss. Family wealth dropped, and the price of oil
increased greatly. The Great Recession created a lasting aftermath on the economy and the lives of
Americans. The impact of the staggering loss of financial investments and employment security, and
the decline of real estate value that devastated the U.S. economy during the Great Recession, is still
being felt even to this day. The unemployment rate is still returning to normal after the Great
Recession. This is because during the economic recession, job loss increased dramatically. This had
a huge impact on the lives of Americans. According to Investopedia, "As a result of the Great
Recession, the United States alone shed more than 7.5 million jobs, causing its unemployment rate
to double. Further, American households lost roughly $16 trillion of net worth as a result of the
stock market plunge. (Investopedia)" Many people lost their jobs, which prevented them from
earning money. This meant that many people couldn't afford to buy food and clothes, and had to sell
their belongings

Economic Recessions : The Great Depression
Economic recessions have been around for years and are very unpredictable for anyone can be
affected by these economic downfalls. They had an impact on society for decades, and the effects of
these economic recessions are still felt to this day. There have been more than forty seven known
recessions that have occurred in this country over the years, and are a major part of American
history. Although economic recessions are a natural hardship that the government and its citizens
will encounter at some point in time lasting about only six months, the most famous and well–
known recession that had happened in this country would be The Great Depression. The Great
Depression, one of the worst economic depressions in the history of the industrialized world, lasted
from 1929 to 1939. It began when the stock market crashed in October 1929, which resulted in
millions of investors losing their jobs. As a result, consumer spending and investment had dropped,
and by 1933 the country was at its lowest point and millions of Americans were left unemployed
also half of the country's banks had failed. During this time of crisis, average American citizens had
undergone many obstacles just to survive and to feed their families. With that being said, living
everyday life was a struggle for most Americans.
The Great Depression was the first to develop a large urban middle class. Families who depended on
wage income and who believed that the necessities of life included not only food and

The Recession Of The United States
Introduction The 2008–2010 recession is a period when an economic decline was witnessed in
major world markets. The U.S. was among the worst hence pressuring the Federal Reserve to make
efforts towards evading further damages. The recession was characterized by a rise in both
economic demand and asset prices. Other features of the recession included high cases of
unemployment, slumping commodity prices, and a drop of international trade. To avoid a further
economic decline, the Federal Reserve implemented various strategies that would help stabilize the
nation. In cases of economic imbalances are viewed as the main cause of the recession. In response
to the recession's damages, the Federal Bank had the main task of restoring sanity, ... Show more
To highlight the steps that the Federal Bank followed in evading the recession.
To identify the impacts of the Federal Bank's actions to the country's loans, interest rates, and
business institutions.
Problem Statement
The 2008–2010 recession is viewed by many Americans as more severe compared to the 1930s
Great Depression. This recession threatened the stability of financial institutions, and a severe drop
of stock markets. The crisis facilitated the collapse of key businesses such as the housing sector;
consumer wealth declined as well as a downturn in economic activities. The consequences of the
recession were negative, and they threatened the stability of major economies. All the faulty
monetary and fiscal policies had to be developed for purposes of saving the American economy. The
outcome of the recession was so severe that identifying appropriate solutions seemed to be an
impossible task. However, the presence of the Federal Bank helped solve the great mystery that was
damaging the most economies' economic well–being. The knowledge of the Federal Bank's action
plan is vital since such challenges may be experienced in the future.
Literature Review
The Federal Bank implemented various strategies with which it fought the negative impacts of the
recession. Various steps were followed in reinstating America's economy to its previously stable
state. The steps followed involved;
Identification of the causative

Impact of Recession and Its Effects on Hrm
Impact of Recession and its effects on HRM INTRODUCTION: The world has suddenly
plummeted into a deep economic crisis (called Global Meltdown or Financial Tsunami), the worst
ever since the 1930's. It has almost taken all the countries across the globe into its grip. Almost all
the sectors of economy with varying degrees have caught business by surprise during the current
global downturn with so much swiftness that every day has become a question of survival.
Organizations are grappling with low demand of their products, manufacturing plants are kept
idling, export markets are dying, job markets are being annihilated everyday and the symptoms of
slowdown are getting starker and starker with every passing day of downturn phenomena. ... Show
more content on Helpwriting.net ...
Highly paid employees have been asked to agree on a voluntary cut as in the cases of Motorola and
Jet Airways. Bonuses are significantly frozen. Even 15 out of 20 AIG companies have frozen
compensation levels and increment. There has been the return on variable pay which the financial
service sector has been increasingly using. Jet Airways has slashed salaries of its top key executives
by 25%. Pilots and engineers earning 10 lakhs per month would have to experience a pay cut of
20% where as chief executive and operational heads would experience 25 % pay cut. The company
has also decided to freeze all sorts of allowances to trainee pilots, though the pilots who come below
Rs.75, 000 per month salary bracket have been left out. Production Cut : Indian manufacturing
sector has no less been affected by economic downturn. In many cases, companies have trimmed
production by reducing the number of working days to three to five days a week. Hyundai India (by
25%), GM India (by 10%), Maruti Suzuki (by 6.3%), Toyata India (by 30%), Madras Almunium Co.
have all cut back capacity of production while some companies have shut plants or mills completely.
Around 50% of 4000 ginning mills in India (mostly the Punjab, Maharastra, Gujarat, and Andhra
Pradesh) have closed their shutter completely. The survey conducted by FICCI on the impact of
slow down on the Indian manufacturing sector that textiles, metal

The 2008 Recession Affected The Global Economy
With the after effects of the stock marketing falling in 2008, and less investments involving risk and
the GDP falling. This is when the economy began turning internationally. With imports, exports and
foreign investment falling along with the combination of employment and production being cut
back this recession affected the global economy. The unemployment rate in the United States began
to skyrocket as well. Below is a graph depicting the unemployment rate in the United States during
the 2008 recession. This graph data is from Oregon Economic Crisis Analysis.
With lower rats of employment the United States Federal Reserve needed monetary policy to
stimulate the economy. With many individuals loosing their jobs primarily in the ... Show more
household savings increased and spending decreased. Going into 2008, many households could
afford to keep debt and manage it because of the good financial indicators. Below is a graph from
Creditworthiness showing the U.S. average household debt vs saving leading into the 2008 financial
crisis. Most of the debt seen by households was in the form of mortgages, and loans against people's
mortgages. Again with the government regulations and push for more people to own houses,
builders to expand their developments and banks to offer subprime loans which lead to competition
among banks to lower interest rates, give out adjustable rate mortgages, and even give no income no
asset loans, it was easy to get the credit backing from banks and financial institutions for
individuals. This increased spending and debt can be contributed to why the economy was looking
up for many years, and the economy was booming. However when this uncertainty began to fall,
more people pulled out of their personal investments that they considered risk and starting hanging
on to their money. Below is a chart from the U.S. Bureau of Economics depicting the household
savings before and after 2008. It is important to look at personal savings to see how the money
supply could have also affected the economic crisis of 2008, which turned the economy into a
recession. With lower money supply in the economy and more in savings because of

The Success Of A Recession
Warren Buffett, entrepreneur and investor once said, "It's only when the tide goes out that you
discover who's been swimming naked." In order to know exactly what Mr. Buffett was talking about
when he said this line, you would have either had to be there or one day have the opportunity to ask
him yourself. However, in the context of comparing this quote to economics, or perhaps banking,
one could say that what he meant was that the choices that are made today might not be judged until
later down the road. For example, a recession is not something that just happens over night. In the
event leading up to a recession, there are many factors and every recession is unique in their own
way. As for the great recession in 2008, the causes included subprime lending, and greed amongst
lenders and borrowers. Before jumping straight into the causes of the 2008 recession, first you must
be informed of the history in previous recessions America has had to face. Since the Great
Depression ended in mid 1930's, America has had to overcome around eleven recessions. Now some
might argue that not all recorded recessions were worthy of getting the tittle as an official recession.
Many will simply say it was slight hiccup in the economy because of the short six to eight–month
duration of the smaller recessions. When divided over the years It seems that the United States has
one to two recessions every decade. However, everyone of the short recessions had a significant
impact on the American

The Recession Of A Recession
Economical term 'recession' means a significant decrease in activity across the economy, which last
longer than few months. This phenomenon is visible in employment, wholesale–retail trade, and
others. The recession is considered a normal part of the business cycle. Nevertheless, a one–time
crisis can trigger the onset of a recession. The global recession through 2007 to 2009 resulted in
significant breakdowns to practically all the developed and developing countries. In order to prevent
a future financial crisis, numerous government policies were enforced. A recession usually last 6 to
18 months and interest rate fall to stimulate the economy. During a recession, people tend not to
spend, borrow, but to save money because of a fall in confidence. The government initiates an
expansionary fiscal policy which involves increasing stimulus government spending and cutting
taxes. However, the question is can increased stimulus spending help end the recession. The first
article, "Increased Stimulus Spending Can Help End the Recession" by Lawrence H. Summers,
argues that "for a successful economic recovery, the US government must pursue measures that
increase confidence, borrowing, and spending" (Summers 1). Summers alleges that the reason why
recession keeps on is because of lack of demand. An increase in spending to increase demand is the
cure, even though too much spending was part of a cause in recession. Summers defined a recession
as:
Recessions are times when there is too

The Recession of 1973-1975
The recession of 1973 through 1975, was due to the Organization of Petroleum Exporting Countries
(OPEC) who rose gas prices and imposed an embargo against the United States. This quickly caused
oil production to be cut dramatically, leaving no choice but to increase the price in oil. This
recession, I am going to pin point the causes, fiscal and monetary policy the government uses to
help the economy slowly come out from the recession. Also I am going to pin point the recession's
recovery and expansion. The causes of this recession was due to the unemployment being too high
and how it had rose even higher through the years. The unemployment rate was at 4.9% by the
fourth quarter and rose significantly at 8.3% by the fourth quarter of ... Show more content on
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During these years, Ford was the current President who cut taxes, hoping to increase consumption
goods. In 1974, the federal budget was close to being balanced with a deficit of less than 1% of
GDP. In the fiscal year, the GDP rose to 3.4% and 4.3% the following year. This temporary deficit
of the tax cut in 1975, helped raise the federal deficit, increasing the aggregate demand. They did
not worry seeing the unemployment rate increasing rapidly in the 1974 because the enactment of
new legislation ensured that a higher percentage of the unemployed end up receiving compensation
in 1975. The first steps in taking action to the 1974–1975 recession was changes in taxes and
spending. "These changes heavily weighted toward a higher disposable income and consumption of
moderate and low income persons." (The Economic Policy Institute) The results weren't so great,
the consumption percentage of GDP rose in 1974 to 1975 and the investment percentage of GDP
was lower in 1975 than in the 1974. Giving that the Ford tax increase of 1974 was not the best
policy at that time. Really, the opposite contra cyclical policy was needed because it increases
aggregate demand in recessions and decreases aggregate demand in overheated expansions. They
also used monetary policy to support President Ford's stimulus package strategy, efforts to stimulate
the economy. Nominal interest rates fell at a good rate in 1974, causing the recovery to be well
under way by when it began to rise again in

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