ECO203 Week 4 Discussion 2 The Effect of Bank Lending on the Economy

This week discussion is based on the Effect of Bank Lending on the Economy it being hard for a year for poor people to get loans or grants from banks without the 4 c’s and the credit crunch affects consumer spending and business investment because people are trying to get loans in need loan. Unfortunately, the credit crunch has to rise and to fall. Due to the lack of work in other hardship problem, due to the impact of the economy because it comes terrible in so many ways.

 Credit crunches make it nearly made it dangerous for every consumer and even businesses in the world to get loans or a small business grant and the high-interest rates are unbelievably too high. Because business, consumer, state and government projects and spending are doing too much on borrowing, they monetary policy changes every day during a recession, banks are unwilling to take on additional credit risk(Amacher & Pate, 2012, 14.3).

A credit crunch affects aggregate on demand, GDP: Productivity would decrease as the market is inefficient and unemployment is, unfortunately, Unemployment would decline as there would be a demand for people to sell this new product and set up this product for people for businesses that own home. Unwilling to lend money due to the high-risk from being unemployed.

                                                             Reference

Amacher, R., & Pate, J. (2012). Principles of Macroeconomics [Electronic version]. Retrieved from https://content.ashford.edu/ This text is a Constellation™ course digital materials (CDM) title.