What are the effects of economic crisis?
– collapse of financial institutions leading to bail out by govts – hence increase taxes – increased taxes leads to less disposable income – people spend less, decreased revenue for govt (less earnings from vat and income tax), less people spend, less need for jobs – umemployment – global effects: devaluation of currency, increased tax and low consumer spending inhibits investment from multinational firms – low confidence in govt – increased expenditure for social welfare payments – people unable to pay loans – bankruptcy – housing prices decreased – meaning people trying to sell homes will find it difficult as they wont get near the value of it – virtually no liquidity in financial sector – college graduates unable to find jobs – resulting in emmigration, lots of well educated young people leaving the country these are just some of the major effects hope this helps
