When Recession Strikes, Time to Start Saving

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Presentation transcript:

When Recession Strikes, Time to Start Saving Piece Of Mind When Recession Strikes, Time to Start Saving Student name 03/25/09

“Hard times will persist in 2009 as consumers, squeezed by layoffs and tighter credit, delay purchases of cars and other big –ticket items”

The Business Cycle Expansion Peak Recession Trough The normal condition of a rising economy Expansion The maximum level of Real GDP reached Peak Declining economy due to falling production Recession The lowest point ending recession Trough As private saving increases, private spending declines and is a contributing factor of an economic recession.

What is affected by a Recession? Economic Recession Output Income Employment Trade

Which factors affect the Supply of Loanable Funds? Expected Future Income Wealth Disposable Income

Investment Market Supply & Demand 2008 Your Topic Goes Here Investment Market Supply & Demand 2008 Baseline supply & demand curves for loanable funds before the decrease in expected future income SLF₁

Investment Market Supply & Demand 2009 Your Topic Goes Here Investment Market Supply & Demand 2009 Expected Supply of Future Loanable Income Funds SLF₁ New Eq. Rate New Eq. Investments

The Overall Effects of a Recession upon the Market for Loanable Funds Expected Future Income Supply of Loanable Funds Equilibrium Real Interest Rate Equilibrium Quantity of Investments

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