1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Veseljchak [2.6K]
3 years ago
8

How can the loan decisions of individuals and private bankers contribute to the instability in the macroeconomy

Business
1 answer:
Lesechka [4]3 years ago
5 0
Loan decisions made by both individuals and banks contribute greatly to the macroeconomy. Since everyone participates in the macroeconomy at large everyone is in some way tied together in terms of the ability to get and control credit. From this perspective many banks were willing to loan money to individuals based on the assumption that even if they couldn't make the payment the increase in house values would be enough to cover any potential losses. The issue arose when too much credit was extended, housing slowed and then there was little demand for new houses. This started a cascade of issues in the macroeconomy in terms of a housing bubble, an end to easy credit and a situation in which individuals and banks both had to be bailed out in order to prevent a complete collapse of the macroeconomy as a whole.
While private bankers made the loans there are also individuals that take loans that they know they can't repay or don't plan for situations in which they can't make a payment if something were to go wrong in terms of their job or a family issues that may arise. For this reason individuals are also responsible at a microlevel for the problems created at the macro level as a whole for the economy. Such borrowing had to end immediately to stave off future failures of banks who may not have had the liquidity and solid financial backing to survive such a predicament.
You might be interested in
Suppose at the end of the meeting that Jack agrees to offer the restaurant buyout, including the non-competition agreement. Prio
loris [4]

Answer:

D) Yes, as long as he actually communicates the revocation to Hal and Sophia (or their agent) prior to acceptance.

Explanation:

In contract law, an offer can always be taken back as long as the other party hasn't accepted it yet. In this case, Jack agreed to make an offer about the restaurant and he even included certain details that apparently were important (non-competition agreement), but since Hal and Sophia haven't accepted it yet, Jack can take it back without fear of any claim being made against him. All he has to do is communicate his decision of taking back his offer to either Hal or Sophia, or their agent (if there is one).

3 0
3 years ago
Borasco Corp. owns land with a fair market value of $200,000. Borasco purchased the land 10 years ago for $65,000 and owes a lia
FromTheMoon [43]

Answer: B. $65,000

Explanation:

The options to the question are:

A. $15,000

B. $65,000

C. $150,000

D. $200,000

It should be noted that the corporate liquidations of property are typically treated as either an exchange or a sale and the profit or the loss made will be recognized by the corporation usually based on the liquidating sale of the assets of the corporation.

In certain cases whereby the distributee that is, the individual who is entitled to partake in the share of an estate distribution is a corporation that is in charge of the distributing corporation, this may lead to the distribution not to be taxable.

Due to this, Alvo has a basis of $65,000. The reason is that the land was not sold and therefore Alvo did not get $200,000.

6 0
3 years ago
Jerome, Sheila, Gary, and Ella agreed to purchase a tract of land and make it available for use as a free playground for neighbo
lesya [120]

Answer:

Yes

Explanation:

The damages can be recovered as Jerome and Gary hung the playground swing improperly. A child was injured due to their negligent actions. The case will be on Meadowbrook Playground and not on the individual person who has committed the mistake. According to law, the damages can be recovered as the enterprise owned the whole property, and due to their carelessness in the installation of swing, the accident took place. The child's parent has every right to recover damages from the playground owner.

7 0
4 years ago
What are the different types of contract? The different types of contract are express contract, ______ contract, unilateral cont
ladessa [460]
Implied is another type of contract.

I hope this help
7 0
4 years ago
Read 2 more answers
Need Help ASAP<br> Its a Career Planing
In-s [12.5K]

Answer:

All of the above

Explanation:

A Library is an accumulation of resources, materials and educational documents for the purpose of knowledge sourcing. It can be a physical building loaded with materials, journals, publications, etc, or an online platform.

A public library is a library open to everyone basically for the acquisition of knowledge online or offline. It also provides services such as access to internet facility, a quite environment, library staffs helping to sort for documents, photocopying borrowing of books, little entertainment, research resources, etc

6 0
3 years ago
Other questions:
  • Most economists believe that a cut in tax rates a. would generally increase government tax revenue. b. would have no effect on a
    12·1 answer
  • Watson Oil recently reported (in millions) $8,250 of sales, $5,750 of operating costs other than depreciation, and $1,000 of dep
    14·1 answer
  • A 401(k) plan is a type of _____
    8·2 answers
  • What is a rule of solid database design regarding calculated values?
    10·1 answer
  • Respond to the following comments:
    11·1 answer
  • Final exam Donald approves on behalf of Evelyn-but without authorization-a contract with Farouk to build a new silo. Evelyn does
    7·1 answer
  • A nondurable good is defined as a(n)
    6·1 answer
  • Find the federal withholding tax using the wage bracket method for each of the following employee.
    12·1 answer
  • 1. An economy is initially at full employment, but a decrease in planned investment spending (a component of autonomous expendit
    8·1 answer
  • Using too many different shapes within a design can
    11·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!