Economic Collapse: The Great Depression and Its Worldwide Effects
The Great Depression’s Global Origins
Existing connections in the international economy, especially the dependence of the United States on the European economy, caused the Great Depression to spread throughout the world. The falling prices in America affected other industries globally that had higher prices than American goods. These industries, unable to compete, saw their exports drastically reduced. At the same time, the decline in U.S. demand (and hence of its imports) halted exports in many
Read MoreThe Great Depression of 1929: Causes, Impact, and Recovery Strategies
The 1929 Economic Crisis
Origins of the Crisis
The Crisis of 1929 was a universal economic downturn, primarily characterized by a crisis of overproduction. How did this situation develop?
During the First World War, countries not participating in the conflict focused on producing and selling goods to warring nations, thereby creating a fictitious market. They sold their products, increasing their profits, even if payments were sometimes delayed. They even lent money to warring countries to purchase
Read MoreUnderstanding Key Financial Instruments and Market Dynamics
Commercial Bill Market Operations
Commercial Bill Market in India: Operation Explained
The Commercial Bill Market in India is a sub-market of the money market, where short-term negotiable instruments called commercial bills (or bills of exchange) are traded. These are used primarily to finance working capital needs of businesses, especially for trade transactions.
How Commercial Bills Operate
Issuance of the Bill (Trade Transaction)
A seller (drawer) sells goods on credit to a buyer (drawee). To ensure
Understanding Financial Risk in Investments
What is Financial Risk?
Risk is defined in financial terms as the chance that an outcome or investment’s actual gains will differ from an expected outcome or return. Risk includes the possibility of losing some or all of an original investment.
Basics of Investment Risk
Each investor has a unique risk profile that determines their willingness and ability to withstand risk. In general, as investment risks rise, investors expect higher returns to compensate for taking those risks.
Key Takeaways on Risk
- Risk
Business and Finance Terminology Explained
A period of stock market speculation ended dramatically in October 1929…
1. depression, 2. expanded, 3. upturns, 4. downturns, 5. boom, 6. peak, 7. recession, 8. contracted, 9. recovery
The traditional definition of auditing is a review and an evaluation…
1. exactness, 2. departures, 3. a firm’s established methods for recording business, 4. independent, 5. judge, 6. most senior executives and advisors, 7. approved, 8. owner’s of the company’s equity, 9. company’s yearly assembly, 10. inadequacies,
Read MoreEurozone Economic Crises and COVID-19: Policy Responses and Lessons
The Three Crises of the Eurozone
Stage 1: The Global Financial Crisis
Following the Great Depression, strict regulation was designed to limit risk. The deregulation phase started in the 1980s, followed by a rapid expansion of financial sectors in the USA and Europe. Banks became active investors, leading to issues like:
- Maturity mismatch
- Currency mismatch
During the Great Moderation, banks took major risks, including providing house mortgages to high-risk individuals in the US. When house prices stopped
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