Edward88 asked:
Why is there a depression in the economy? What causes it? I know the very basics. That businesses are doing poorly, thus, there is less money for consumers to spend so that the cycle continues. The money must be going somewhere? Also, how come banks and finance institutions go under?
Thanks a lot for your help! I’d prefer a more theoretical answer rather than just the current reasons for the depression.
Wesley
Why is there a depression in the economy? What causes it? I know the very basics. That businesses are doing poorly, thus, there is less money for consumers to spend so that the cycle continues. The money must be going somewhere? Also, how come banks and finance institutions go under?
Thanks a lot for your help! I’d prefer a more theoretical answer rather than just the current reasons for the depression.
Wesley
Frances
The US is in recession due to major banks going broke and the stock market crash. Also, the US is in this situation because of the failure of non bank lending institutions like Fanny mae and Freddy mac because of a lack of regulation.