Greek Financial Crisis

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Greek Financial Crisis 1. Page 501 answer question 1 in the "hit or miss section." Be specific in your answers and give at least two examples.

Participating in the global economy has benefits, but it also comes with perils in that economic catastrophes on the other side of the world can have real impacts at home. The European debt crisis and recession affect American exports and the stock market. There are consequences for global trade and possibly for the American Financial system as well. Exports are an important source of the American recovery so if Europe tanks, there will be fewer exports to Europe and that will hurt American manufacturing. Not only does the European debt crisis directly affect American exports it impacts other areas of the global economy which further drags on growth rate here at home. The recent slowdown in China has been attributed to the weakness in Europe. Europe being in a prolonged recession has caused the global economy to slow down. And that has an indirect effect in the United States in terms to the unemployment problems. If worldwide demand were higher, there would be more jobs created for American workers.
Europe is not an insignificant part of global demand, Germany’s economy is the fourth largest in the world, followed closely by France, but collectively the economies of all 17- Euro area countries are nearly equal to that of the United States, at about 13 trillion dollars versus 15 trillion of the U.S.

2. Page 501 answer question 2 in the "hit or miss section." Be specific in your answers and give at least one example.

Investors share this cost because they do not how much debt of Greece some Financial institutions have. Also, not only were the Greek loaded with government bonds, which eventually paid less than face value, but even the big four banks that survived are weighed down by about 65 billion…...

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