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Question 4
“During the 2008 Financial Crisis, the nominal interest rates of all major industrialised countries hit the lower bound and policymakers lost any power to stimulate the economy.” Comment and explain
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- a. based on the functions of the banking system, give reasons why governments bail out banks during an economic crisis b. is the world heading for recession? explain the conditons under which the world can be classified as being in a recession as COVID- 19 persists. Explain linking the pandemic to the various stages of a recessiona. Based on the functions of the banking system, give reasons why governments bail out banks during an economic crisis? [Not more than one-page] b. Is the World heading for a recession? Explain the conditions under which the world can be classified as being in a recession as COVID-19 persists. Explain linking the pandemic to the various stages of a recession. [Not more than one-page]Question 1 (ILOs: A1, A2, B1, C1, C2, D1, D4) a. Some countries do not have well-established market for debt securities or equity securities. Why do you think this can limit the development of the country, business expansion, and growth in national income in these countries? b. When economic crises in countries are due to a weak economy, local interest rates tend to be very low. However, if the crisis is caused by an unusually high rate of inflation, the interest rate tends to be very high. Explain why?
- INTERNATIONAL BUSINESS AND TRADE Mini-Case Synopsis and Questions In 2008 and 2009, international financial markets suffered large declines in stock, bond, and real estate prices. Due to excessive government spending and related borrowing, Greece experienced a debt crisis that worsened after the introduction of the euro. To head off default, the Troika provided Greece a bailout in 2012. Some experts believe Greece should exit the euro entirely, but others argue that if other countries follow Greece, the euro and the EU itself could be seriously damaged. Questions: How did Greece get into trouble with its government debt? Did joining the Eurozone help them pay rising government debts? Explain your answers. Should Greece exit the euro? How would it benefit? What could go wrong? Explain your answers.D Question 7 Prior to the 2008 financial crisis, if the central bank is interested in performing an expansionary monetary policy, which of the following methods could it adopt? Selling bonds, decreasing the discount rate, or increasing the reserve requirement O Buying bonds, increasing the discount rate, or decreasing the reserve requirement O Selling bonds, increasing the discount rate, or increasing the reserve requirement O Buying bonds, decreasing the discount rate, or decreasing the reserve requirementWhat is Efficient Market Hypothesis (EMH) Does the Global Financial Crisis of 2008-09 support or invalidate the EMH? article if needed: The Global Financial Crisis and the Efficient Market Hypothesis, What have we learned?
- Problem 1 Comment and analyze each of the following changes or statements. As the value of the Euro rises, what is likely to happen to the Euro balance on current account? Explain. What is likely to happen to the value of the dollar as the U.S. current-account deficit increases? Explain. A current-account surplus is not always a sign of health; a current-account deficit is not always a sign of weakness. Comment.How did the 2008 global financial crisis end? What elements contribute to the US's ability to resolve the crisis?What caused the Collapse of 2008 in the Financial Markets? How did interest rates contribute to the Collapse? What did the Federal Reserve do to help the economy recover?
- Question 90 Debt explosion can happen when debt is restructured with interest payments being deferred. central bank looses its credibility. increases in the interest rate and increases in the debt ratio feed on each other. Government borrows from IMF and it imposes a lot of conditions.How do you relate development of global value chains in global economy and the causes of 2008 financial crisis ? Did government responses sufficient to prevent another crisis? If not, what do you suggest as plausible measures?global finance 21. The _____ Era saw the rise of a growing schism between the industrialized and emerging market nations. 22. A ________is any restriction that limits or alters the rate or direction of capital movement into or out of a country. 23. An extreme problem that has emerged several times in international financial history is ______,one of the problems that capital control has designed to control. 25. The _________ i.e. the risk associated with the business line of the individual firm can be eliminated through portfolio diversification by investors.