What?
In simple terms, what is global debt?
When countries owe too much money and struggle to pay it back.
What actually was the Great Depression?
- A global event that had a lack of internal coordination
- Was when most of the governments and financial institutions turned inward or collapsed.
What did the U.S. Federal funds system cut interest rates from to by 2003? ( __ -> __ )
6.5% -> 1%
Name 2/4 examples given that shut down at the beginning of early 2020.
Hospitals and healthcare systems were overwhelmed.
International travel and tourism came to a halt.
Trade between countries slowed down.
Millions of people lost jobs or had to stay home.
What could be the cause of the debt? (2 step answer)
Countries wanting to fund for things like school or healthcare, so they borrow money from banks or other countries.
From when to when was the Great Depression AND what year was the stock market crash?
1929 to 1939, and the stock market crash was in 1929.
Why did people rush to buy homes they could not afford?
Morgage rates dropped, making homes more affordable short term
Name all 3 essentials that people went out and stocked up on.
Food, cleaning supplies and toilet paper.
What actually causes a global debt crisis?
When countries struggle to pay the interest on the money they borrowed and can’t pay off their debts on time.
Breifly explain the buying circle in terms of the economic bubble. (HINT: the start, middle, end)
START: The steep, then constant price was like blowing a bubble up.
MIDDLE: Then came the waiting for the price to increase, hence the bubble staying the same.
END: Countries bought products and waited for the price increase, but unfortunately waited too long. The bubble had burst, the high prices of those products dropped dramatically. The investments from those countries were now lost, leaving them more in debt.
What does Subprime mean?
It means offering mortgages to people with low credit scores or unstable incomes.
What is inflation?
Inflation happens when the prices of goods and services go up over time. As a result, the value of money goes down, meaning your dollar doesn’t buy as much as it used to.
What two things main things affected farmers?
Overproduction of crops and taking out loans but not being able to pay. (Will also accept losing their farms).
By 2007, what did the Federal Reserve raise their interest rates too, and why? (2 part question)
5.25%, to control inflation.
What did the government put money into during COVID that contributed to inflation?
Stimulus checks, unemployment benefits, and business loans.
Did the upper class suffer like the rest?
No.
After the collapse of the Lehman Brothers, why were other banks and financial firms scared of lending money?
They were scared they wouldn't get their money back.
What specific industries are still trying to fully recover?
Those relying on global trade and travel.