Answer:
What made the Great Depression "Great" was the government response. Constant changes the regulatory environment, tax increases, massive deficits, and failure to let the market correct paralyzed the economy in its depressed state for 15 years.
Both were caused primarily by an over expansion of credit rooted in loose money supply. The monetary response to the current recession has been different. Rather than tightening to force the market to bottom, the Fed has maintained low rates in an effort to re-inflate the bubble conditions. Hoover/Bush & FDR/Obama responses are similar as all tried to spend their way out of the problem.
1929 crash:
After WWI, Britain reset the pound to the pre-WWI level even though their money supply had far exceeded pre-WWI levels. In an effort to slow the flight of gold from Britain, the US federal reserve (led by Benjamin Strong) lowered interest rates. As always, artificially low interest rates caused massive distortions in asset values. Money flowed into the stock market and people who would not normally have been stockholders bought stocks in place of other investments that would have yielded better interest rates absent fed policy. Margin was used excessively because the real cost of leveraging was distorted by fed interest rate policy.
The fed continually lowered interest rates all the way into 1929. When the bubble popped, they tightened policy and raised rates. This contributed the deflationary spiral; however, the deflationary spiral could not have been as severe without the loose policy during the bubble.
2008 crash:
Beginning in the early 1990s, the federal reserve (led by Alan Greenspan) lowered rates while monitoring consumer prices as indicators of inflation. They ignored bubbles in the stock market directly caused by their inflationary monetary policy. When the stock bubble popped, they lowered rates further and pushed misdirected investment towards other assets - most commonly housing.
After the attacks of 9/11/2001, the fed pushed rates to 0 (long term rates were effectively negative and continue to be).
Explanation:
Answer:
IS FREE ENTERPRISE SYSTEM NECESSARY?
What is a free enterprise system?
This is a system that allows individuals to self-regulate their business and make business decisions with little or no government restriction or intervention. This system is pro-Capitalist.
This system helps promote and encourage healthy competition because one business owner is trying to outdo the other business owner by offering to sell at a cheaper rate or giving discounts for a limited time period to maximize profit.
However, while this sounds good, it has some disadvantages because, in the spirit of competition and pursuit of profit, business owners get tempted to cut corners and even do some unethical or even downright illegal things to make a profit since they are unregulated by the government. A business owner might decide to ignore safety checks for his workers in order to save that cost which could be catastrophic.
Another potential downside of a free enterprise system is the danger of business owners raising prices of goods or services when demand exceeds supply which in turn causes inflation.
In conclusion, while a free enterprise system gives room for competition, I feel it is not absolutely necessary for an individual to make an impact in the business world unless such a man is an honest person who would not change his principles to make a few extra money.
They teach to the people to do many tings
including religion and they teach how to do many tings.
Answer:
The nations of the Euro Zone have A. abandoned their national currencies and switched to a common currency.
Explanation:
The <u>Euro Zone</u>, or <u>Euro Area</u>, is a monetary union of 19 of the 28 European Union (EU) member states who abandoned their national currencies, such as the French franc, the Irish pound, the Italian lira or the Spanish peseta, and adopted the euro (€) as their common currency in 1999.