I will pay for the following essay Analysis of Financial Crisis and Corporate Finance. The essay is to be 7 pages with three to five sources, with in-text citations and a reference page.
A recession is usually represented by business cycles. The business cycle incorporates three periods throughout the cycle. It includes recession followed by recovery and then trough (peak). This cycle repeats and the trough slow down eventually resulting in a recession.
The recession period is characterized by very slow economic activity. An economic recession neglects the economic concept of the Philip’s Curve and the indirect relationship between inflation and unemployment. Instead, the prevalence of high inflation rate and a high unemployment rate makes the situation worse.
The concept of the recession of the financial crisis is not novel for the world. America in 1930 experienced the greatest recession which was termed as “The Great Depression.” This is referred to as the darkest period in the history of America.
The American economy was experiencing a boom in the 1920s. Industrial output was increasing in spite of the not very high demand from the consumers. Ford Motors launched its car that was affordable by ordinary people as well. The manufacturers were encouraged to avail credits for their production which in the other hand did not have the demand to that extent. Moreover, there was a persistent crisis in the agricultural sector. This might have contributed towards the low demand. The economy was also inflated due to the credit boom which was due to the help provided to the UK whose economy was facing persistent deflation accompanied with high unemployment.
In 1930, several banks went bankrupt. Some called in for the loans they had rendered also when the people did not have the financial strength to pay. This pressure accumulated with the uncertainty of declaring bankruptcy, people started collecting their savings from the banks. The persistent fall in savings resulted in low investments.
The combination of low output high unemployment was severe. Moreover, reduced saving and .thus, low investment posed a negative multiplier impact on the economy. Thus, recession got severe and transformed into a Depression.