IMSB Overview of financial crisis.docx

Troubles of firms family financial intermediaries and

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troubles (of firms, family, financial intermediaries and sovereigns); and big extent government support (in the structure of liquidity sustain and recapitalization). As such, financial crises are classically multidimensional measures and can be rigid to typify via single indicator. On the other hand, journalists and economists use great recession as a term to describe a severe, prolonged economic downturn (“Great Recession,” 2012). The longest recession began in December 2007 and ended in June 2009. The consequences from this crisis notably serious in several sides including the unemployment rate surged and real gross domestic product (GDP) fell from its peak to trough. As the financial crisis and recession deepened, measures intended to revive economic growth were implemented on a global basis (Rich, 2013). Like many other countries, fiscal stimulus programs that used different compositions of government spending and tax cuts were instituted by the United States. The possibility of financial crisis and great recession has increased because of several factors which are lower mortgage loan and terms, psychological factor, and also large international cash inflow. All of these factors are linked to an economic bubble which causes financial crisis and great recession. Economic bubble can be called as asset bubble which means when an asset price, such as housing, stocks or gold, become over-inflated and the prices of securities rise so sharply over a short period.
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Financial crisis. (n.d.). In Business Dictionary . Retrieved from Claessens. S., & M. A. Kose. (2013). Financial Crises: Explanations, Types, and Implications . International Monetary Fund. Great Recession . (2012, March). Retrieved from - Great- Recession Rich. R. (2013). The Great Recession . Retrieved from
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