Cause and correction for the 2007-2010 economic crises.
Cause and correction for the 2007-2010 economic crises: Between the years 2007-2010, the United States experienced a great economic recession. This was characterized by inflation, unfavorable balances of trade and payments in many countries, high levels of unemployment, in ability of indebted countries to clear their debts among others.
They are mainly caused by many factors in the world, mainly originating from the world economic driving countries, like the United States, Britain other European countries.
Once recession sets in, correcting it takes time, so that it moves in a cycle to a boom, which over time gets back to a recession and the cycle continues. Economic crisis are correcte by use of fiscal and monetary policies (Pruthi, Surinder, and Surinder, 2011).
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The economic crisis that resulted from these factors impacted on the world’s economy negatively. It resulted in great losses in various financial institutions.
It also resulted in high levels of poverty and unfavorable balances of international trade. This recession was mainly correcte through increase taxation. Which controlled the amount of money in circulation as the governments were able to get it back (Manilla, 2011).
The government expenditure was also highly controlle, till the year 2010 when the economic crises subside. It was generally worse than the great economic depression. This is in terms of the resulting lower level of GDP that it resulted in, higher levels of unemployment and worse balances of trade.
Assessment of Adb’s Response to the Global Economic Crisis 2007-2010. Manila?: Asian Development Bank, 2011.
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