Economic crisis
Professor Yeaman
ECO 2013 - 526381
04 December 2015
Economic Crisis
The increase rate of expenditure and relatively low income has led to inequalities that give rise to the economic and financial crisis. In this case, the policies to address the factors causing the inequalities are not made in an efficient and effective manner. Factors like the unequal and inefficient resource distribution have not been made clear from 2008 onwards. Various interventions to address the current economic and financial crisis should be put in place. This discussion is going to explain the reliable predictors for financial and economic crisis and finally describe the achievements and pending issues in the context of global crisis.
The reliable indicators of economic crisis
The financial and economic crisis is the breakdown of an economic system due to the currency crisis or inequality in income distribution. The major indicators of an upcoming economic crisis are the high level of short-term debt. The increase rates of debt in a short term basis are found to lead to adverse economic crisis in the future. High level of debts brings forth the burden of paying back the debt when income is accrued. This leads to lack of growth in the economy and so this indicator in case it is noticed needs to be addressed in time to avoid the issues emerging economically (Kaur, 2015).
Kaur (2015) argues that the Indicators of economic crisis range from one point to another; the external competitiveness of the sector is another indicator. This is pointed out in the models describing the indicators and early signs of economic and financial strains. The increased trade deficits and the higher accounts deficits in the current state show an increased in the vulnerability to economic crisis due to the appreciating foreign exchange rates; also, the intense appreciation of the currency that hinders competitiveness and is closely linked to the...