What Would You Do?

551 Words3 Pages
What Would You Do? Situation 1. Economic growth and development combined with financial innovation, altered the structure of the financial system over the period of time. Widespread bank failures, the suspension of gold payment, and severe business depression. What would you do if you were the leader of FRC and when did this happen in history? 2. For some time the growth of demand has exceeded the expansion of production potential. Technological innovations have boosted the growth rate of potential, the effects of this process also have spurred demand. With labor markets already quite tight, a continuing disparity between the growth of demand and potential supply would produce disruptive imbalances. A key element in this disparity has been the very rapid growth of consumption resulting from the effects on spending of the remarkable rise in household wealth. However, the growth in household spending has slowed noticeably this spring from the unusually rapid pace observed lately. Certainly, we have seen slowdowns in spending during this near-decade-long expansion that have proven temporary, with demand growth subsequently rebounding to an unsustainable pace. Another factor said by some to account for the spending slowdown is the rising debt burden of households. What would you do if you were the leader of FRC and when did this happen in history? 3. Farm prices are falling and the unemployment rate is rising. The value of a dollar is falling while workers' wages are dropping. Stocks were selling for more than 16 times their earnings than they did nine years before but there was a huge stock market crash and millions of dollars were lost. A total of 10,951 banks collapsed. The large and growing disparity of wealth between the well-to-do and the middle-income citizens made the U.S. economy unstable. What would you do if you were the leader of FRC and when did this happen in history? 4. There was a recession that was the worst in 30 years, as the Dow Jones Industrial Average falls by nearly 400 points and the economy stalled. U.S. oil production could no longer keep pace with demand. U.S.: 5 percent of the world's population but uses 25 percent of oil consumption and 22 percent of carbon emissions. There was inflation and stagflation. What would you do if you were the leader of FRC and when did this happen in history? 5. US experienced a severe recession.
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