Principles of Economics (12th Edition)
12th Edition
ISBN: 9780134078779
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Question
Chapter 29, Problem 1.2P
To determine
Impact of stock market crash on different economies.
Expert Solution & Answer
Explanation of Solution
Asia experienced stock markets crash in 1997, as a result, Hong Kong’s was down nearly 30 percent, Thailand’s was down nearly 62 percent and Malaysia was also down around 60 percent. Situation was same in Japan and Korea. Such large drops negatively affect the wealth of households in these countries. Therefore people starts to spend less. As a result consumption decreases which leads to decrease in
These events also affect U.S economy very badly. Mainly, there are several Americans are invested in foreign countries. Therefore when the stock markets collapsed in Asia, would create a modest wealth effect in the U.S market. Another problem faced by the U.S economy was, when the recession occurs in the foreign countries mean that, they would reduce the consumption from the U.S economy as a result, the export
Economics Concept Introduction
Concept introduction:
Stock market: Stock market can be defined as the place where the buying and selling of equities or stocks of publically held companies.
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Suppose that a vaccine manufacturing company
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An increase in U.S. income received by Canadians.
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Aggregate Demand and Aggregate Supply - End of Chapter Problem
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Chapter 29 Solutions
Principles of Economics (12th Edition)
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