The Financial System : America Is The Driving Force Of The World Economy

The Financial System : America Is The Driving Force Of The World Economy

Length: 1173 words (3.4 double-spaced pages)

Rating: Better Essays

Open Document

Essay Preview

The Financial System in America is The Driving
Force of The World’s Economy
America’s financial market is the largest in the world, our dollar stands as a bench mark that all other currencies can be compared to. The economic draw that America has gathered over the years has created an economy so pivotal to the world economy that investors from all over depend on knowing every move that the Fed makes. This responsibility weighs heavily and effects nearly every person dependent on today’s economic standings.
Financial Market
The financial market directly effects the flow of saving and investments in corporations. This facilitates in production of goods and services and in turn helps generate more capital. If investments are high, companies can take more risks and expand more, expanding the economy as a whole. The motions and actions in financial markets signal to other what to expect, this helps direct the flow of all other aspects and participants in the national economy. (Econ, 2005) The financial market also plays a big role in credit and loans. For a lot of businesses the ability to keep running, even when in good standing, is dependent on access to loans. If banks are seeing drops in the market as a whole they become reluctant to hand out loans, which can make it harder for businesses to keep running without exceptional credit. This is especially damaging to small businesses and even major corporations who have had recent failures or debt increases. (Best Invoice Factoring, 2015) This can also effect the individual as a company struggling to acquire funds will often turn to cutting spending. This can often lead to lower benefits, lower hire rates and lower wages. Negative side effects of decreases in the financial market can ...

... middle of paper ...

... rates increasing smaller markets are more pressured to keep up making it harder for them to attract investors. Rising interest rates can effect dollar denominated debt in smaller markets. Countries like Turkey, Brazil and South Africa finance their debts through dollar denominated debt. If the US dollar appreciates and the interest rate goes up, the exchange rate will increase to a point where this debt become unmanageable. (Nath, 2015)
America’s financial market’s importance is clear and there is no easy solutions when so many variables are involved. The international markets and the global economy need to be able to rely on and predict where the Fed will go and its subsequent effects. A lot goes into the decisions made by the Fed and its board, and the success of those decisions can change a lot more then how well the banks or stock exchanges are doing.

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

Essay on The Effects Of Driving On The Safety Council

- In today 's world driving plays a huge role in most everyone’s lives. People spend hours of their day in a car, logging tens of thousands of miles every year. Driving is a favored mode of transportation, a rite of passage for teenagers, a necessity for the working class, and above all a privilege. With this privilege comes responsibility, driving is a serious matter and shouldn 't be taken lightly. According to NHTSA 's Fatality Analysis Reporting System (FARS), in 2011 alone, 32,479 were killed from motor vehicle crashes in the United States, with another 2.2 million injured....   [tags: Driving, Automobile, Driver's license, Affect]

Better Essays
1026 words (2.9 pages)

Financial Manager Oversees The Monetary Concerns Of Any Organization Essay

- Introduction A Financial Manager oversees the monetary concerns of any organization. They also offer financial counsel to support customers, and associates to empower them to make sound business judgments. Prior to any decision made by the most organization, monitoring, interpreting cash flows and forecasting future trends are essential for both short and long-term decision. Financial Managers recommend investors ways to invest money, and showing them why their company is potentially profitable....   [tags: Financial ratio, Finance, Apple Inc.]

Better Essays
1731 words (4.9 pages)

Essay on Cloud Computing's Impact on Accounting and the World

- Technology is definitely the driving force in our world today. All it takes is one look around a room to see someone either on a tablet or smartphone, but how does technology impact business and what trends are there in the information technology field. Currently, cloud computing is one of the most talked about trends in the IT field and for good reason. The cloud gives unprecedented amount of the way a business is run from accounting systems all the way to process control. What is even greater is the impact it has on the global economy....   [tags: financial reports with real time numbers]

Better Essays
1194 words (3.4 pages)

Alcohol : Causes And Effect Of Drinking While Driving Essay

- Alcohol inebriation can cause one make less responsible decisions as a well-known fact. Much to that matter the reason that alcohol plays a role in many harmful situations such as automobile accidents. Automobile accidents are one of the leading effects of drinking while driving. “Drinking while driving rates highest amongst incoming freshman, males, athletes, and fraternities and sororities, as statistics have proven” (Sorokin, 2002). College students that are in their first year of college uses alcohol as a means to fit in socially and as a way to unwind....   [tags: Human sexual behavior, Sexual intercourse]

Better Essays
1030 words (2.9 pages)

Essay about The Moment of Truth: America's Financial Crisis

- America is in fear over the financial crisis, and no clear solution has presented itself. The political parties continually blame each other in a never-ending cycle, while the state of the economy keeps falling and the national debt keeps rising. Along with that, many functions of the government, such as tax reform and Social Security, have ‘leaks’ in them, where money is being lost. As researchers look into the crisis more and more, they keep finding scary results, such as the predicted debt in 2035 being 185 percent of the country’s (GDP)....   [tags: political parties, fiscal responsibility, debt]

Better Essays
1502 words (4.3 pages)

How Money And Its Effects On The World Essay

- Money, the one thing society loves to reprimand, people want to blame anything for their troubles instead of mending the said problem themselves. People are blinded by their gluttony for money they will do uncanny things to satisfy the hunger that’s deep within them. Money was first used for as a type of barter system but was soon corrupted into the thing that makes us beastly. From a young age are taught that we need money to function in this now modern world, as a result people are going to great lengths to obtain this money even if it means doing something that could be deemed unjustified....   [tags: Need, Want, Thing, Reward system]

Better Essays
1003 words (2.9 pages)

The Payment System Implemented By Medicare Post World War II Essay

- In the United States, everyone pays for healthcare including insurers, employers, the government, and individuals. Public insurers became increasingly concerned by the rising cost of healthcare and something had to be done to resolve the issue. This paper discuss the various payment system implemented by Medicare post World War II to help assist with maintaining the cost of healthcare in the nation. These systems were: fee-for-service (FFS), usual customary and reasonable (UCR), diagnosis-related groups (DRGs), lastly health maintenance organizations (HOMs)....   [tags: Health insurance, Health care, Insurance, Money]

Better Essays
785 words (2.2 pages)

Government Policy, Moral Hazard and the Endless Financial Crisis Essay

- The story begins in 1938 when Roosevelt establishes Fannie Mae to purchase mortgages from lenders and sell them to investors as mortgaged backed securities. Loan originators are no longer exposed to mortgage default risks, and they have a continuous supply of money to lend as they sell each loan to Fannie. In 1970, congress creates Freddie Mac to buy and securitize private loans not guaranteed by Fannie Mae. Because Freddie Mac and Fannie Mae are government sponsored enterprises (GSE), investors believe the securities are backed by the US Government and thus very low risk....   [tags: Fannie Mae, Freddie Mac, mortgage, loans]

Better Essays
1751 words (5 pages)

The Asian Financial Crisis Essay

- The Asian Financial Crisis In the 1980s and for most of the 1990s, the entire Asian marketplace was seen as nothing less than a miracle. Business was booming, and economies in the region enjoyed GDP growth rates nearing 10% per year—4 to 5 times the growth rate of the US economy at the time. It began in the ‘80s when foreign investment in Asian countries began to increase. Foreign investors lured by stable governments, the promise of high returns, and currencies that were tightly pegged to the US dollar began throwing money into the ASEAN-5 (Indonesia, Malaysia, the Philippines, Singapore, and Thailand)....   [tags: Economics Economy Government Essays]

Better Essays
1675 words (4.8 pages)

Financial Services Report Essay

- Financial Services Industry Report In order to succeed in the global market, it is imperative to know the various global financial institutions and the sources of funds for international operations. This paper will identify the role of financial institutions in the global economy and explore changes this industry will be experiencing during the next decade. In addition, this paper will demonstrate the impact these changes will have on Campbell Soup Company. Financial institutions have the ability to serve as agents for its clients providing financial services....   [tags: essays research papers]

Better Essays
1189 words (3.4 pages)