高中体育教学计划Financial crisis
By
To
December2010
Introduction苹果dns
The economic always has problems and many crisis ari. That is natural. The healthy economic will improve people’s living standard. However, when the economic dedvelop to a certain extent, the recession is inevitable. After the recession, the economic will be revived. The key is to do well policy to the crisis. If the country has enough preparation, it will dealwith perfectly.
I.The cau and impact of the financial crisis.
理论研究
幼儿户外游戏The financial crisis is caud by the too low interest rate and more borrowing. More investm
ent, more consumption, more output, more income, higher housing price. However, there are risky mortgages in the CDO and the risky ones are impod. Then, the housing boom burst and the credit crunch happen. The financial crisis occur. The economic come to the recession.
II. The financial crisis with the equation Y=C0+C1(Y-T)+I+G and I=I(Y(+),i(-)).
客户心理学 This equation explain the influence of financial crisis. Before the financial crisis, the investment and GDP is high. After the financial crisis, the investment and GDP come down. The crisis strikes the economic.
. The multipliers on the credit crisis.
What is the credit crisis? The cau of the credit crisis is that the borrowers can not pay the mortgages and the investment become less and less. The multipliers can make a little money into a lot of money. Also, it can make a little worry about the lending into the shrinking currency. The credit crisis lead to the shrinking economic.
. The relationship between the USA’s bond rate and the financial crisis. The relationship between the China’s, Amercia’s MPC, MPS and financial crisis.
The real data about the USA’s bond rate will explain in the IS and LM curve. The shift of LM curve will related to the interest rate and output. Then, it will explain into the cau of the financial crisis.
China’s MPC is opposite to the America’s. China’s MPC is very low and have a lot of savings. Then, when the financial crisis happens, China can deal with it well. Therefore, China can invest in America. Real data will explain well for the crisis.
. America’s bailout and moral hazard.
What is the bailout? It says that the government give capital to the company which is going to bankrupt. What is moral hazard? It means that one side who has more information will make u of the information and will be more beneficial than the other side. Then explain the relationship between bailout and moral hazard.
. Explain the China’s stimulus package to the financial crisis.
The stimulus package is consisted of the fiscal and monetary policy. Then, the AS, AD, IS and LM curve will related the policy.
. Compare China’s and USA’s government respon to the financial crisis and explain.
英语翻译. The definition of free market economic and explain cau of crisis into the inevitable recession.
Body
1. Explain the cua and impact of the current financial cris. U your own words with a step explanation and incorporate real data.
The interest rate is so low that people begin to borrow money and the government have the current account deficits such as Amercia. This is about the data about the current account deficits of USA in recent years.
Therefore, USA begin borrow money from the global financial market and many investment come into USA. Then, too much assts reach Amercia and the price of hous
进士科
es increas. From the picture above, we know GDP decreaa from 2006 to 2008 and it is caud by borrowing from other countries. At the same time, the investors have many mortgages and they are very happy. However, in the CDO(collateralid debt obligation) there are many unsafe mortages and are hidden under the AAA and BBB(healthy mortgages). Later, the defective mortgages increa. From a website, “during 2007, defective mortgages (from mortgage originators contractually bound to perform underwriting to Citi's standards) incread to over 80% of production" tells the situation of the CDO. In the following picture, we can know there are many CDO in 2006 and 2007.
Of cour, the credit market occurs. There comes the U.S. Housing Bubble. People can not pay the mortgages. The picture tells that the price goes up in 2005 and comes down in 2006 and 2007.
Most of the defective mortgages are made by the people who have sub-prime mortgages. They can not pay and have high risk of borrowing. In March of 2007, it is estimated that there are $1.3 trillion sub-prime mortages of USA.
As they can’t pay mortgages and the price of hous decreas.
Then, more and more CDO are impod and it burst. Investors stop lending and economic begion to go into depression.
2. Explain the financial crisis in relation to the following equation Y=C0+C1(Y-T)+I+G and I=I(Y(+),i(-)).
From Y=C0+C1(Y-T)+I+G and I=I(Y(+),i(-)), we can get this function Y=C0+C1(Y-T)+ I(Y(+),i(-))+G.
At first, the interest rate is very low and people begin borrow money from banks. Then, the ooutput goes up and consumption increas. Then, people can have more disposable income. After a time, the bank have not enough money and government help borrow money from other countries and put into the market. Certainly, output increas. However, the boom in the CDO burst and the investment decreas. The price of hous goes down and people can’t pay mortgages. Last, the income decreas and economic slow down.
