United States Economy Essay
An economy truly is the fundamental factor that signifies a country’s stability and worth. A country’s economy not only impacts its wealth and overall being but it also justifies the value of the money that is being generated. For instance, the United States of America has one of the strongest economy in the world and is exponentially growing. Unfortunately, within the 2000-2010 period the U.S.A faced an economic tragedy that will forever haunt the country. In fact, Poverty Bytes (2013), acknowledges this time period as the ‘lost decade’. Within this ten year time frame the country experienced dropping GDP (Gross Domestic Products) percentages, traumatizing inflation, lower wages, a higher unemployment rate, an increase of poverty, and
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These outcomes were triggered by numerous elements such as taxation, demand and supply, price fluctuations, interest rates, the housing bubble, mortgage rates, the shadow banking system, credit crisis, and income distribution which are clarified throughout this …show more content…
Just like the majority of the business world demand and supply are key components. Supply surpassed demand during this time period as individuals received lower salary wages, got laid off of work, and as the economy as a whole weakened. The increase in supply forced prices to drop. Meanwhile, interest rates soared and tranquility of credit principals that banks obligated worsened the economy’s condition even further. At the same time that home prices were decreasing mortgage rates were sky rocketing. Some people didn’t bother to pay their payments anymore, others no longer had high equity for their homes. This housing tragedy is called the eruption of the house bubble system. Citizens fell into a dark hole, mortgage lenders and banks filled for bankruptcy, and the economy reached a dead end. This burst in the housing world was in full swing domino mode as it fired up the shadow banking system and then the credit crisis. The shadow banking system suffered due to the liquidity pressures, the upsurge in margin calls, the devaluation of assets, and the catastrophe of the regulatory structure which moved the economy into a deeper credit
These outcomes were triggered by numerous elements such as taxation, demand and supply, price fluctuations, interest rates, the housing bubble, mortgage rates, the shadow banking system, credit crisis, and income distribution which are clarified throughout this …show more content…
Just like the majority of the business world demand and supply are key components. Supply surpassed demand during this time period as individuals received lower salary wages, got laid off of work, and as the economy as a whole weakened. The increase in supply forced prices to drop. Meanwhile, interest rates soared and tranquility of credit principals that banks obligated worsened the economy’s condition even further. At the same time that home prices were decreasing mortgage rates were sky rocketing. Some people didn’t bother to pay their payments anymore, others no longer had high equity for their homes. This housing tragedy is called the eruption of the house bubble system. Citizens fell into a dark hole, mortgage lenders and banks filled for bankruptcy, and the economy reached a dead end. This burst in the housing world was in full swing domino mode as it fired up the shadow banking system and then the credit crisis. The shadow banking system suffered due to the liquidity pressures, the upsurge in margin calls, the devaluation of assets, and the catastrophe of the regulatory structure which moved the economy into a deeper credit