The Dominon Effect

1.How is the "domino effect" affecting the global economy?
Economic Domino Effect



The "domino effect" is just an example how one event triggers another event, which causes a ripple effect movement like a row of falling domino's.


2. What caused the U.S. housing crisis?
Economy Effect of Housing


The U.S. housing crisis was caused by lenders giving out huge loans to people that have a low-income. Then those people couldn't pay off the loans that they owe for their homes and caused home prices to fall. Cause of homes prices falling, people try to sell their homes to pay off their loans but find it impossible to find a buyer.



3. Why is the cut in consumer spending a serious pr0blem?


Because consumers spend less money, it is causing a serious problem to the economy. With spending cut less, there is a less demand for goods. Also, less spending is causing a drop in sales tax revenue which is causing government and states to cut on programs.



Manufactures try to produce their produces, and have a problem selling their products because of their sells. If they don't sell enough, they might have to close down and people will lose jobs then, causing the people to spend less money.


4. How is less spending affecting local and state governments?

Less spending is affecting local and state governments to cut down on their programs. Also, taxes are raised and emergency funds are used to balance their budgets.


5.What trend does expert Brian Sack predict for the economy?

Brain Sack predicts that the economy has a high chance to fall into a recession and will be a tough to recover which may take a few years. We are also going to have a tough time ahead of us in 2009 and 2010.

6.What have the world's key central banks done to stop the crash?

The world's key central banks are starting to work together to stop the crash and have cut interest rates.