Question

(3-5 sentences): Suggestions for potential solutions (how to ensure an Economic crisis like this does not happen again):

Answer 1

Answer:

Reduce public and private sector debt to reduce solvency risks.

Many economy experts state that the main problem which cause an economical crisis was solvency, not liquidity. This means that financial institution didn't have capability to pay, they had enough liquidity (active that can be transformed in cash), but that weren't enough to cover all debt, which brought crisis.

Structural reforms to improve competitiveness of real economy.

The system needs to be reformed about competitiveness, because there're too many monopolies in the economy which is against diversity, leading to a crisis. Doing more fair the competition stage, the economy will have more participants, which is crucial to have a free market model, at the end, this competitiveness will bring back the confidence in this sector. Another positive result of this measure is that there're gonna exist more jobs for people, which is crucial, because the rate of unemployment is dramatic.

Therefore, these two measures could be a possible solution, because attempt in two specific problems which are really serious.