Question : When we talk whether there prosperity or not, we generally : 8081
When we talk About whether there is prosperity or not, we are generally talking about the amount of the gross domestic product that goes to each person. Standard of living, meanwhile, refers to the extent to extent the economy in a region enables the production of and purchase of goods and services. The financial system, meanwhile, is the group of institutions dealing with savings and borrowing of money, made up of financial markets and financial intermediaries. The stock and bond markets of a country are the financial markets, while financial intermediaries include banks and mutual funds. You. for example, can Use a bank to take out a house loan, in exchange for interest payments on the principles of that loan That money is taken from the collective savings of bank customers, which often are paid interest for money put in at the bank. Publicly traded companies, meanwhile, use the money you use to buy shares in the company to fund operations and expansion, in exchange for a cut in the profits made by those companies. Of course, if you invest, there is always a risk that the company will lose money and not generate profits sometimes even shrinking in size and scope of operations Stock prices are supposed to be based on rational information under the efficient markets hypothesis, but some economists would argue that irrational psychological factors also influence the prices of stocks. Unemployment and inflation are also unfortunate realities of the economic system Inflation is the general rise in prices. When I was young, one could easily buy a house for under $100,000 in the area around LASC. Today, a house for under $400,000 is a rarity, and most are probably well beyond that. Unemployment comes when there is not enough production, which is often a reflection of a lack of consumption, often linked to inflation As a means of stimulating economic growth, the Federal Reserve may increase or decrease the supply of money in the system, manipulating interest rates at the national level. Answer two of the following questions: The United States has been considered one of the strongest economies in the world for nearly a century now. with one of the highest standards of living in the world. Recent years have seen a significant drop in economic well-being due to a massive recession stemming from a combination of a tremendous housing bubble coupled with a subprime lending scheme by some of the biggest banks, compounded by high personal debt domestic ally and globalization-based trade deficits causing a meltdown of the economy. While the recession is considered over, many would argue we are far from out of the woods (unemployment is officially 4% but could arguably be as high as 12% still, and we could have a problem with regard to housing prices today, etc). Based on the reading, what do you think arc some steps that could be taken to bring the U.S. economy to its strongest position? Do you engage in personal banking or invest in the stock market? What factors influence your decision to choose a bank or a stock? If you do not use either, why not?