Consumer spending and business investment

Assignment Help Macroeconomics
Reference no: EM131071224

In 200-250 words: 

In conducting expansionary monetary policy, even if the Federal Reserve Bank is providing reserves to the banking system, during a recession or during periods of slow economic growth, banks may choose not to lend out their reserves when interest rates are low and potential borrowers look risky.  This is known as a "credit crunch". Explain how a credit crunch affects economic growth. Specifically, answer these questions in your post:

  • How does a credit crunch affect consumer spending and business investment?
  • How does a credit crunch affect aggregate demand, GDP, and unemployment?

Reference no: EM131071224

Questions Cloud

Employees received for that week : In a particular week, Nora sells goods to the value of £4,500; Odette works 38 hours at standard rate, plus 5 hours overtime at time-and-a-quarter. Calculate how much each of the three employees received for that week.
Determine the fan power input needed to overcome : determine the outlet temperature of air as it leaves the underwater portion of the duct. Also, for an overall fanefficiency of 55 percent, determine the fan power input needed to overcome the flow resistance in this section of the duct.
Exercises on internal rates of return : The following are exercises on internal rates of return:a. An investment of $1,000 today will return $2,000 at the end of 10 years. What is its internal rate of return?
Calculating the nation real gdp : "The Commerce department announced that it is shifting from 1987 to 1992 as the base year for calculating the nation's real GDP and price index."
Consumer spending and business investment : How does a credit crunch affect consumer spending and business investment? How does a credit crunch affect aggregate demand, GDP, and unemployment?
Brunhilde wishes to maintain her consumption : Brunhilde owns 1,000 shares of a firm that has just announced a dividend cut from $8.00 a share to $5.00. The share price is currently $200. If Brunhilde wishes to maintain her consumption, what should she do to offset the dividend cut?
Determine the following the built-in voltage : 5 A JFET has Na= 10 19cm -3, Nd= 10 16cm -3, a= 0.1 µm, L= 10 µm and Z= 1 mm. Assume the device is Si with an intrinsic concentration of 10 10cm -3and a relative dielectric constant of 11.8. Assume also that in saturation the square law can be use..
Houses contribute to gdp : He lives in the other house and pays $20,000 in dividends per year. If he were to rent the house in which he lives, he could earn $17,000 per year in rent. How much do the housing services provided by these two houses contribute to GDP?
What makes some people healthy and others unhealthy : Based on both your life experience and on research about predisposing factors of disease, what makes some people healthy and others unhealthy? Are there socio-economic factors associated with risk factors?

Reviews

Write a Review

Macroeconomics Questions & Answers

  Reasons for higher salaries for economics professors

At some universities and colleges, economics professors earn hugh salaries than professors in some other fields.

  Date has made a relatively small role in us

Technological advance, that date has played a relatively small role in U.S. economic growth.

  Write detailed report on chinas growth in last thirty years

The question is belongs to Economics and the question is about the growth rate achieved by China in the last 30 years beginning from 1978 to 2009.

  Is the current monetary policy expansionary or

is the current monetary policy expansionary or contractionary? give your reasons for your answer.why has the federal

  Still remaining including the ricardian framework

Still remaining including the Ricardian framework, consider that Canada has 100 units of labor available for production while Mexico.

  Classical and keynesian views of wages

During the 1990s, Western Europe experienced high rates of unemployment, while in the US, rate of unemployment remained far below natural rate.

  Workforce of the future depends on the us populations

Different races now or likely to be in workforce of the future depends on the US populations racial demographic changes.

  How might this cause the your income or someone you know

List 1 thing the government can do to pull a nation out of a recession using fiscal policy? How might this cause the your income or someone you know's income to rise?

  What action does govt sometimes take to prevent a fall

(b) Provide an example of the interaction between each of these groups. (c) Sometimes a fourth group is included. What would that group be. Provide an example of the interaction between this and the groups listed in your answer to (a).

  1a i if there was no item in the economy widely accepted in

1a. i if there was no item in the economy widely accepted in return for goods and services how would transactions be

  Explain how a consumer as well a business in the perfectly

Explain how a consumer as well a business in the perfectly competitive arena maximize utility, discussing any similarities.

  Do the tax that was imposed either efficient or equitable

Each person would pay taxes equal to 10 percent of the value of his or her car. Would the tax be proportional, progressive or, regressive What assumptions do you make in answering this question Do you think the tax that was imposed either efficien..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd