LESSON 4.2 Foreign Debt and International Power Relations. Social Security
|
|
- Maximillian Holmes
- 8 years ago
- Views:
Transcription
1 WORLD HISTORY LESSON 4.2 Foreign Debt and International Power Relations debt safety net reform GDP deficit priorities budget Social Security governance discretionary human capital mandatory infrastructure trade-off spending revenue baby boomers Medicare health care economic growth ESSENTIAL DILEMMA Does foreign debt create a dangerous imbalance of power between creditor and debtor nations? INTRODUCTION By continuing to support American Treasury instruments the Chinese are recognizing our interconnection. We are truly going to rise or fall together. We are in the same boat. Our economies are so intertwined, the Chinese know that to start exporting again to their biggest market, namely the United States, the United States has to take some very drastic measures with this stimulus package, which means we have to incur more debt. Hillary Clinton, U.S. Secretary of State (Associated Press, 2009) China, the largest creditor of the world s sole superpower, has every right now to demand the United States to address its structural debt problems and ensure the safety of China s dollar assets.... Mounting debts and ridiculous political wrestling in Washington have damaged America s image abroad. Xinhua News Agency, the official press agency of China (Associated Press, 2011) For most governments, accruing foreign debt is as normal an act as enforcing laws and collecting taxes. In the event that a government is unwilling to raise taxes or enact deep spending cuts, its only other option is to borrow capital to pay for its expenses. As a result, nations regularly borrow money from both internal and external sources. For example, as of May 2011, the Chinese government held 26% of the United States UNDERSTANDING FISCAL RESPONSIBILITY 1
2 foreign debt, totaling 8% of the United States total public debt (U.S. Department of the Treasury, 2011). Although accruing debt in general is often viewed negatively, the concept of being indebted to foreign entities remains particularly contentious. Some American policy makers have justified accepting loans from external sources like the Chinese government in order to help stimulate a stagnating economy. For example, Douglas Holtz-Eakin, director of the Congressional Budget Office (CBO) under President George W. Bush, said of the United States debt to the Chinese government: Dollars all look the same. Their ultimate source doesn t matter (Schneider, 2005). Historians have also noted that as early as the Revolutionary War the American government has sought credit from external sources. Conversely, many others have argued that these loans make the United States vulnerable to foreign financial influence, leading to an imbalance of power between the two nations. Governments must decide how much foreign influence they are willing to accept in exchange for needed financial investment. In this lesson, students will explore this controversy by comparing the practice of borrowing and lending between individuals with the practice of borrowing and lending between nations. This lesson is appropriate for secondary students (grades 9 12) who have a basic understanding of credit and interest. Following this lesson, students will understand that the implications of the national debt have far-reaching consequences. In short, nations who lend money have a stake in the nations to which they lend, and debtors who receive credit are beholden to their creditors. Students will be able to suggest some of the ways in which debt becomes a point of leverage in the relationship. This lesson depends on the content of articles that have been taken from mainstream media sources. Although excerpts are included to emphasize the main point of each of the articles, students must have access to the full piece in order to complete the activities in the lesson. KEY TERMS The following terms and concepts are used in this lesson and appear in the online glossary: Credit, Economic warfare, Interest, Public debt, Stimulus, Treasury bonds (T-bills, Treasury securities, Treasuries) STUDENTS WILL UNDERSTAND There are consequences for both debtors and creditors when money is lent between nations. Foreign debt can become a point of leverage that creditor nations use against debtor nations. STUDENTS WILL BE ABLE TO Ask good questions and make inferences. Formulate a position or course of action on an issue. Recognize, explain, and analyze causes and consequences. UNDERSTANDING FISCAL RESPONSIBILITY 2
3 RELATED CURRICULUM STANDARDS Common Core State Standards (CCSS) Initiative 1 CCSS.ELA-Literacy.RH Compare the point of view of two or more authors for how they treat the same or similar topics, including which details they include and emphasize in their respective accounts. CCSS.ELA-Literacy.RH Compare and contrast treatments of the same topic in several primary and secondary sources. CCSS.ELA-Literacy.RH Determine the central ideas or information of a primary or secondary source; provide an accurate summary that makes clear the relationships among the key details and ideas. The College, Career, and Civic Life (C3) Framework for Social Studies State Standards 2 D2.His Analyze how historical contexts shaped and continue to shape people s perspectives. D2.His Integrate evidence from multiple relevant historical sources and interpretations into a reasoned argument about the past. NCSS s National Curriculum Standards for Social Studies 3 7. Production, Distribution, and Consumption. Social studies programs should include experiences that provide for the study of how people organize for the production, distribution, and consumption of goods and services. 9. Global Connections. Social studies programs should include experiences that provide for the study of global connections and interdependence. National Center for History in the Schools World History Content Standards 4 Era 9 The 20th Century Since 1945: Promises and Paradoxes, Standard 3. Major global trends since World War II. LIST OF LESSON RESOURCES The following resources are used in this lesson and can be downloaded online: 1. Sam and Chris 2. Cartoon: Great Wallet of China 3. The United States and China: News Articles 4. Major Foreign Holders of U.S. Treasury Securities 1. National Governors Association Center for Best Practices, Council of Chief State School Officers. Common Core State Standards. Washington, DC. Copyright National Council for the Social Studies (NCSS). The College, Career, and Civic Life (C3) Framework for Social Studies State Standards: Guidance for Enhancing the Rigor of K-12 Civics, Economics, Geography, and History. Silver Spring, MD. Copyright National Council for the Social Studies (NCSS), National Curriculum Standards for Social Studies: A Framework for Teaching, Learning, and Assessment. Silver Spring, MD. Copyright National Standards for History: Basic Edition. By Gary B. Nash, Charlotte A. Crabtree and National Standards for History Taskforce. Published 1996, National Center for History in the Schools. UNDERSTANDING FISCAL RESPONSIBILITY 3
4 DAY 1 of 2 ENTRY Frame this lesson for students as follows. Inform them that borrowing between nations is common, but accepting loans from other nations is usually a politically charged, controversial decision. Governments must decide how much foreign influence they are willing to accept in exchange for the investments they need. Tell students that they will be exploring how this controversy is played out between the United States and China by first exploring a controversy that will be easier to analyze a circa-1950 loan agreement between two students, back when newspapers were still delivered by kids on bicycles and saving $3 a week would make a dent in college expenses. The loan agreement is between two students, Sam and Chris. The story is in two parts: The Paper Route and The Conflict. LESSON STRATEGIES AND ACTIVITIES Sam and Chris Divide students into pairs and distribute Resource 1, Sam and Chris. Assign one student in each pair the role of Sam, and the other student the role of Chris. The Paper Route requires that Sam and Chris make a loan agreement. At the end of the negotiations, break and ask each pair to explain and justify their contract to the rest of the class. The Conflict describes the relationship between Sam and Chris 5 weeks into their loan agreement. Ask students to discuss the questions that follow the reading, first with their partners and then with the entire class. Students should describe the developing tension between Sam and Chris and analyze the conflicts of interest between them. The United States and China Begin by asking students what they know about the relationship between the United States and China. Present students with the cartoon Great Wallet of China (Resource 2). Give them several minutes to study the cartoon and then ask them what they notice. Draw students out on the detail of what they see. If students jump to an interpretation of the cartoon, ask them for the basis of the interpretation and ask other students if they agree or disagree. Finally, ask students to consider the meaning of the cartoon, particularly in light of the Sam and Chris story. If students are having difficulty getting into the cartoon, ask them more directed questions such as: ffwho are the two men in this cartoon? [The man on the left is Chinese President Hu Jintao; the man on the right is American President Barack Obama.] UNDERSTANDING FISCAL RESPONSIBILITY 4
5 ffwhy is the cartoonist comparing American debt owned by China to the Great Wall of China? [The cartoonist is arguing that the Chinese government owns a significant, and perhaps dangerous, amount of American debt. The Great Wall of China is the largest man-made structure in the world, hence President Obama s comment that the Great Wallet of China can be seen from space.] ffwhat message do you think the cartoonist is trying to send with this cartoon? See Resource 2 online [Students answers will vary. The two leaders appear strikingly different in the cartoon. President Hu is relaxed and smiling whereas President Obama appears amazed and dismayed by the size of debt flowing into the wallet. Students might suggest that the cartoonist believes the money owed by the United States to the Chinese government is a problem for the United States, but not for China. Students might guess that the cartoonist is critical of the amount of money the United States has borrowed from China because the Great Wall analogy is an exaggeration of the size of the debt.] ffin what ways might the story of Sam and Chris be analogous to the relationship between the United States and China? [In the analogy, Sam, who is lent money, represents the United States, and Chris, who lends the money, represents China. When Sam decides he would like to move on to another job, Chris feels as though he should have a say in Sam s decision, because Sam continues to owe him money. Additionally, Chris would like a guarantee that he will be repaid by Sam.] Conclude the class by asking students to write a paragraph responding to the following prompts: ffin what ways is the loan between Sam and Chris analogous to the loan between the United States and China? In what ways would it not be analogous? ffwhat else would you need to know to answer this question with more authority? DAY 2 of 2 The United States and China: News Articles (If students typically do assignments on the computer at home, this lesson can be modified and these articles can be assigned as homework at the end of day 1.) Download and print enough copies of the full news articles excerpted in Resource 3 to provide each student with one of the articles. Match each article with its question set in Resource 3. Divide the class into groups of three or four students each and distribute copies of one news article to each group. (More than one group may be assigned the same article.) Explain to students that the issues raised in the story about Sam and Chris issues concerning the fairness of the terms of their loan, the inevitable conflict UNDERSTANDING FISCAL RESPONSIBILITY 5
6 of interest between the two parties, and the leverage Chris has over Sam as a result of their agreement are present when there are loans between countries. Tell them that today they will read news articles that discuss the financial relationship between the United States and China and the future of our economic balance of power. Ask students to read their article carefully, discuss it among themselves, and be ready to explain the aspect of foreign debt it describes to students in other groups. When the students in each group understand their news article and have answered the questions related to the reading, scramble the groups to form new ones in which each new group has an explainer for each of the articles. The Teacher s Guide, included in Resource 3, identifies key points for each excerpt. CLOSURE After the groups have had each of the three news articles explained by their classmates, lead a class discussion guided by the following questions to help students clarify their understandings: ffbased on what you have read, how would you describe the current economic relationship between the United States and China? Does either China or the United States hold a majority of the power in this relationship? [China holds a significant percentage of the United States debt and China wants the United States to guarantee that it will repay the debt. Students will likely suggest that both nations incur risks in this relationship. China holds power in the sense that it could hurt the U.S. economy by selling U.S. Treasury bonds at a low rate, which would, in turn, drive the cost of borrowing up for the United States, and possibly increase mortgage rates. On the other hand, the United States holds power in the sense that the Chinese economy is dependent on the sale of exports to the United States. In addition, the Chinese government is heavily invested in the U.S. economy; significant devaluation of the U.S. dollar would negatively impact the value of Chinese currency.] ffwhat consequences might this relationship have for future budget deficits in the United States? [Some economists argue that foreign investors would demand higher interest rates as the U.S. debt levels increase over time.] ffwhat advice would you offer the U.S. government regarding foreign debt? Consider the reasons the United States would incur foreign debt, the risks associated with incurring such debt, and what nations you believe (if any) the United States should not accept loans from. What more would you need to know to answer this question? [Students answers to this question will vary. Students might suggest that the U.S. government work to lower its dependence on foreign investment, while acknowledging the need for loans from external sources. Students might warn that relying too heavily on foreign sources of credit might make the United States vulnerable to foreign influence. Students might recommend only borrowing from nations that are close political allies and can be trusted not to take advantage of economic vulnerabilities. Students UNDERSTANDING FISCAL RESPONSIBILITY 6
7 might also suggest that the United States cut spending or increase revenues to negate the need for high levels of foreign debt. Finally, students will likely need to know how much of a problem the size of the debt is for the country, how much assistance other nations are willing to offer, and on what terms this assistance will be given.] FURTHER ENGAGEMENT Major Foreign Holders of U.S. Treasury Securities As of November 2011, China and Japan had each loaned the United States about $1 trillion. Together, they held 44% of the U.S. Treasury securities sold to foreign countries. Using Resource 4, students will find current data on Treasuries sold to foreign nations and use current news articles to investigate relationships between the United States and major foreign holders of Treasury securities. REFERENCES CITED Associated Press. (2009, February 22). Clinton urges China: Don t stop investing in us. MSNBC. Retrieved from Associated Press. (2011, August 6). Obama absent as China scolds U.S. for debt addiction. CBC News. Retrieved from Faiola, A. (2009, March 14). China worried about U.S. debt: Biggest creditor nation demands guarantee. Washington Post. Retrieved from AR html Lakshmanan, I. A. R. (2009, February 22). Clinton urges China to keep buying U.S. Treasury securities. Bloomberg. Retrieved from Lee, J. (2010, February 26). Paper tiger: China s no threat to the US. Bloomberg Businessweek. Retrieved from Sack, S. (2009, November 19). Great wallet of China. StarTribune. Retrieved from stevesack/2009/11/19 Samuelson, R. J. (2009, October 29). Up against a wall of debt: How much can governments borrow? Newsweek. Retrieved from Schneider, W. (2005, October 25). Re-evaluating U.S. debt. The Atlantic. Retrieved from com/magazine/archive/2005/10/re-evaluating-us-debt/4396/ U.S. Department of the Treasury. (2011, November 16). Major foreign holders of Treasury securities. Retrieved from UNDERSTANDING FISCAL RESPONSIBILITY 7
LESSON 1.4 Taxation and the National Debt. Social Security. Is there a fair and efficient way to fund and maintain the public services we want?
ECONOMICS LESSON 1.4 Taxation and the National Debt debt safety net reform GDP deficit priorities budget Social Security governance discretionary human capital mandatory infrastructure trade-off spending
More informationAdditional information >>> HERE <<< US Dollar Collapse User Review
Additional information >>> HERE
More informationAgenda. Saving and Investment in the Open Economy, Part 2. Globalization and the U.S. economy. Globalization and the U.S. economy
Agenda Globalization and the U.S. Economy Saving and Investment in the Open Economy, Part 2 Saving and Investment in Large Open Economies (LOE) The U.S. Current Account Deficit Fiscal Policy and the Current
More information11/6/2013. Chapter 16: Government Debt. The U.S. experience in recent years. The troubling long-term fiscal outlook
Chapter 1: Government Debt Indebtedness of the world s governments Country Gov Debt (% of GDP) Country Gov Debt (% of GDP) Japan 17 U.K. 9 Italy 11 Netherlands Greece 11 Norway Belgium 9 Sweden U.S.A.
More informationwww.citizenshipteacher.co.uk 2011 16228 1
The stock market www.citizenshipteacher.co.uk 2011 16228 1 Lesson objectives I will understand what a stock market is. I will identify what caused the downturn in the American Stock Market. www.citizenshipteacher.co.uk
More informationThe Economists Voice
The Economists Voice Volume 2, Issue 1 2005 Article 8 A Special Issue on Social Security Saving Social Security: The Diamond-Orszag Plan Peter A. Diamond Peter R. Orszag Summary Social Security is one
More information2.5 Monetary policy: Interest rates
2.5 Monetary policy: Interest rates Learning Outcomes Describe the role of central banks as regulators of commercial banks and bankers to governments. Explain that central banks are usually made responsible
More informationCongressional Budget Office s Preliminary Analysis of President Obama s Fiscal Year 2012 Budget
Congressional Budget Office s Preliminary Analysis of President Obama s Fiscal Year 2012 Budget SUMMARY The Congressional Budget Office s (CBO) Preliminary Analysis of the President s FY 2012 Budget released
More informationHow To Get Rid Of A Federal Budget Crisis
1 1. Animated Open 2. SOT: Montage of Sound on the Deficit 3. Narration: The mid term elections, and the seating of a new Congress, has pushed the debate over federal spending front and center. 4. On Camera:
More informationBah-Da, Dah-Dot, Da-Da, CHARGE!...But to which card?
Bah-Da, Dah-Dot, Da-Da, CHARGE!...But to which card? By Brian Hoover Federal Reserve Bank of Atlanta Lesson Plan Contest 2007 Second Place LESSON DESCRIPTION In this lesson students learn 1) About the
More informationChapter 10 Fiscal Policy Macroeconomics In Context (Goodwin, et al.)
Chapter 10 Fiscal Policy Macroeconomics In Context (Goodwin, et al.) Chapter Overview This chapter introduces you to a formal analysis of fiscal policy, and puts it in context with real-world data and
More informationBig Concepts. Balance of Payments Accounts. Financing International Trade. Economics 202 Principles Of Macroeconomics. Lecture 12
Economics 202 Principles Of Macroeconomics Professor Yamin Ahmad Big Concepts Balance of Payments Equilibrium The relationship between the current account, capital account and official settlements balance
More informationMy Credit Report Card
Lesson 1: My Credit Report Card Lesson Overview: This lesson will provide students with an overview of elements that are included in their credit report. Students will examine how various behaviors affect
More informationNational Income Accounting and the Balance of Payments
National Income Accounting and the Balance of Payments Graciela L. Kaminsky Department of Economics George Washington University Lecture Notes 1 Questions The US current account deficit is about 7 percent
More informationUsing Your Credit - Crazy or Compelling? EPISODE # 115
Using Your Credit - Crazy or Compelling? EPISODE # 115 LESSON LEVEL Grades 4-6 KEY TOPICS Entrepreneurship Credit Interest LEARNING OBJECTIVES 1. Learn about borrowing money. 2. Understand your credit
More informationChapter 2. Practice Problems. MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
Chapter 2 Practice Problems MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Assume that you borrow $2000 at 10% annual interest to finance a new
More informationDecision Making: Hamilton s Economic Policies Part 1: The Debt PROBLEM
Decision Making: Hamilton s Economic Policies Part 1: The Debt PROBLEM The year is 1790, and George Washington has been President under the new national government, The Constitution, for about a year.
More informationEcon 102 The Open Economy
Winter 2007 Econ 102 The Open Economy 1. Be sure to read your copy of the Wall Street Journal every weekday, looking especially for items related to the material in this course. Find an article in this
More informationThe National Debt A Primer and A Plan
At last, American voters can see through the Washington doubletalk about the federal deficits and the national debt. This book uses plain language and a question-and-answer format to explain the unpleasant
More informationMoney Market. The money market is the market for low-risk, short-term debt.
Money Market The money market is the market for low-risk, short-term debt. 1 Substitution Different money-market assets are close substitutes. Since an investor in the money market can choose which asset
More informationLesson 6 Save and Invest: Bonds Lending Your Money
Lesson 6 Save and Invest: Bonds Lending Your Money Lesson Description This lesson introduces bonds as an investment option. Using a series of classroom visuals, students will identify the three main parts
More informationThe Federal Reserve Board
The Federal Reserve Board What you should know about Home Equity Lines of Credit Board of Governors of the Federal Reserve System What You Should Know about Home Equity Lines of Credit 1 More and more
More informationSecurities offered through: Whiteside Wealth Management, Inc. An Independent Firm
Will the Federal deficit eventually lead to a U.S. economic crisis? Could a too rapid attempt to fix the problem lead to another recession? Federal budget deficits are nothing new. In fact, the U.S. government
More informationHow to Establish, Use, and Protect Your Credit
How to Establish, Use, and Protect Your Credit How to Establish, Use, and Protect Your Credit What you need to know Good credit is valuable. Having the ability to borrow funds allows us to buy things we
More informationReadiness Activity. (An activity to be done before viewing the program)
Knowledge Unlimited NEWS Matters The Stock Market: What Goes Up...? Vol. 3 No. 2 About NewsMatters The Stock Market: What Goes Up...? is one in a series of NewsMatters programs. Each 15-20 minute program
More informationStudent Loans Know Your Options
Student Loans Know Your Options Sam Hewitt Director, Political & Grassroots Advocacy, GRPP Samuel J. Hewitt Sam Hewitt is the director of political and grassroots advocacy at the American Speech-Language-Hearing
More informationEXTENDING THE PRESIDENT S TAX CUTS AND AMT RELIEF WOULD COST $4.4 TRILLION THROUGH 2018 By Aviva Aron-Dine
820 First Street NE, Suite 510 Washington, DC 20002 Tel: 202-408-1080 Fax: 202-408-1056 center@cbpp.org www.cbpp.org Revised March 28, 2008 EXTENDING THE PRESIDENT S TAX CUTS AND AMT RELIEF WOULD COST
More informationELIMINATING THE NATIONAL DEBT Securing Your Financial Future
ELIMINATING THE NATIONAL DEBT Securing Your Financial Future Will I obliterate the national debt? Sure, why not? Pat Paulsen, comedian THE FINANCIAL SETTLEMENTS tax eliminates the need for income taxes
More informationDebt and Deficits. David Rosen
Debt and Deficits David Rosen Grade Levels: 9,10,11,12 Document Type: Supplementary Materials Description: Examines the national debt and deficits, looks at their size and impact, and discusses various
More informationChapter 3.1. Capital and Trade Flow Drive Currency Values
Chapter 3.1 Capital and Trade Flow Drive Currency Values 0 CAPITAL AND TRADE FLOW DRIVE CURRENCY VALUES Supply and demand are the simple concepts behind all price movement in the forex market, and no two
More informationComposition of Federal Spending
The Honorable David M. Walker Comptroller General of the United States U.S. Government Accountability Office February 10, 2005 2 Composition of Federal Spending 1964 1984 2004* Defense Net interest *Current
More informationUniversity of Lethbridge Department of Economics ECON 1012 Introduction to Macroeconomics Instructor: Michael G. Lanyi
University of Lethbridge Department of Economics ECON 1012 Introduction to Macroeconomics Instructor: Michael G. Lanyi CH 25 Exch Rate & BofP 1) Foreign currency is A) the market for foreign exchange.
More informationCommentary: What Do Budget Deficits Do?
Commentary: What Do Budget Deficits Do? Allan H. Meltzer The title of Ball and Mankiw s paper asks: What Do Budget Deficits Do? One answer to that question is a restatement on the pure theory of debt-financed
More informationDeficits as far as the eye can see
Testimony of Mark A. Calabria, Ph.D. Director, Financial Regulation Studies, Cato Institute Submitted to the Subcommittee on Insurance, Housing, & Community Opportunity House Committee on Financial Services
More informationFormulas for the Current Account Balance
Formulas for the Current Account Balance By Leigh Harkness Abstract This paper uses dynamic models to explain the current account balance in a range of situations. It starts with simple economies with
More informationOutstanding Loans Received From Abroad by Private Sector. Definitions and Explanations. Statistics Department Balance of Payments Division
Outstanding Loans Received From Abroad by Private Sector Definitions and Explanations Statistics Department Balance of Payments Division Contents I- Definitions... 3 II- Compilation Of The External Debt
More informationGovernment Debt. By Jeremy Sandford. The Park Place Economist / vol. IX
By Jeremy Sandford I. INTRODUCTION Recently, Treasury Secretary Larry Summers implied that the government would be de creasing the supply of government bonds in order to pay down outstanding debt. This
More informationcepr briefing paper Defaulting on The Social Security Trust Fund Bonds: Winner and Losers CENTER FOR ECONOMIC AND POLICY RESEARCH SUMMARY Dean Baker 1
cepr CENTER FOR ECONOMIC AND POLICY RESEARCH briefing paper Defaulting on The Social Security Trust Fund Bonds: Winner and Losers Dean Baker 1 July 23, 2001 SUMMARY The United States government has never
More informationTax Brief. 1 August 2012. Messenger Press the foreign exchange gain/loss saga continues. 1 Facts and issues
Tax Brief 1 August 2012 Messenger Press the foreign exchange gain/loss saga continues At first glance, the Federal Court decision in Messenger Press Proprietary Limited v FCT looks like old news (forgive
More informationRemember the Interest
STUDENT MODULE 7.1 BORROWING MONEY PAGE 1 Standard 7: The student will identify the procedures and analyze the responsibilities of borrowing money. Remember the Interest Mom, it is not fair. If Bill can
More informationInternational Money and Banking: 12. The Term Structure of Interest Rates
International Money and Banking: 12. The Term Structure of Interest Rates Karl Whelan School of Economics, UCD Spring 2015 Karl Whelan (UCD) Term Structure of Interest Rates Spring 2015 1 / 35 Beyond Interbank
More informationSave and Invest Bonds
Lesson 6 Save and Invest Bonds Lesson Description In this lesson, students will learn that bonds are financial assets used to build wealth. Using the more familiar concept of bank loans, bonds are introduced
More informationWHAT YOU SHOULD KNOW ABOUT HOME EQUITY LINES OF CREDIT
WHAT YOU SHOULD KNOW ABOUT HOME EQUITY LINES OF CREDIT More and more lenders are offering home equity lines of credit. By using the equity in your home, you may qualify for a sizable amount of credit,
More informationI. Introduction. II. Financial Markets (Direct Finance) A. How the Financial Market Works. B. The Debt Market (Bond Market)
University of California, Merced EC 121-Money and Banking Chapter 2 Lecture otes Professor Jason Lee I. Introduction In economics, investment is defined as an increase in the capital stock. This is important
More informationJune 6, 2014. Honorable Elizabeth Warren United States Senate Washington, DC 20510. Dear Senator:
CONGRESSIONAL BUDGET OFFICE U.S. Congress Washington, DC 20515 Douglas W. Elmendorf, Director June 6, 2014 Honorable Elizabeth Warren United States Senate Washington, DC 20510 Dear Senator: As you requested,
More informationSimple Interest. and Simple Discount
CHAPTER 1 Simple Interest and Simple Discount Learning Objectives Money is invested or borrowed in thousands of transactions every day. When an investment is cashed in or when borrowed money is repaid,
More informationTopic Overview. Strategies and Management E4: Resources Management Sources of Financing
Resources for the TEKLA curriculum at Junior Secondary Topic 7 Sources of Financing Strategies and Management Extension Learning Element Module E4 Resources Management Topic Level Duration Topic Overview
More informationLesson 13 Take Control of Debt: Become a Savvy Borrower
Lesson 13 Take Control of Debt: Become a Savvy Borrower Lesson Description After reviewing the difference between term loans and revolving credit, students analyze a fictitious character s use of credit
More informationLIST OF MAJOR LEADING & LAGGING ECONOMIC INDICATORS
APRIL 2014 LIST OF MAJOR LEADING & LAGGING ECONOMIC INDICATORS Most economists talk about where the economy is headed it s what they do. Paying attention to economic indicators can give you an idea of
More informationLecture 16: Financial Crisis
Lecture 16: Financial Crisis What is a Financial Crisis? A financial crisis occurs when there is a particularly large disruption to information flows in financial markets, with the result that financial
More informationDelaware Recommended Curriculum Teaching Civics with Primary Sources Grant Project
Delaware Recommended Curriculum Teaching Civics with Primary Sources Grant Project This lesson has been created as an exemplary model for teachers in (re)design of course curricula. An exemplary model
More informationGAO FEDERAL DEBT. Debt Management in a Period of Budget Surplus. Testimony Before the Committee on Ways and Means, House of Representatives
GAO United States General Accounting Office Testimony Before the Committee on Ways and Means, House of Representatives For Release on Delivery Expected at 10 a.m. Wednesday, September 29, 1999 FEDERAL
More informationEXTENDING EXPIRING TAX CUTS AND AMT RELIEF WOULD COST $3.3 TRILLION THROUGH 2016 By Joel Friedman and Aviva Aron-Dine
820 First Street NE, Suite 510 Washington, DC 20002 Tel: 202-408-1080 Fax: 202-408-1056 center@cbpp.org www.cbpp.org Revised March 15, 2006 EXTENDING EXPIRING TAX CUTS AND AMT RELIEF WOULD COST $3.3 TRILLION
More informationCHAPTER 3 THE LOANABLE FUNDS MODEL
CHAPTER 3 THE LOANABLE FUNDS MODEL The next model in our series is called the Loanable Funds Model. This is a model of interest rate determination. It allows us to explore the causes of rising and falling
More informationStandard 7: The student will identify the procedures and analyze the responsibilities of borrowing money.
TEACHER GUIDE 7.2 BORROWING MONEY PAGE 1 Standard 7: The student will identify the procedures and analyze the responsibilities of borrowing money. It Is In Your Interest Priority Academic Student Skills
More informationIpx!up!hfu!uif Dsfeju!zpv!Eftfswf
Ipx!up!hfu!uif Dsfeju!zpv!Eftfswf Credit is the lifeblood of South Louisiana business, especially for the smaller firm. It helps the small business owner get started, obtain equipment, build inventory,
More informationViewing the Current Account Deficit as a Capital Inflow
FEDERAL RESERVE BANK OF NEW YORK IN ECONOMICS AND FINANCE December 1998 Volume 4 Number 13 Viewing the Current Account Deficit as a Capital Inflow Matthew Higgins and Thomas Klitgaard With the 1998 current
More informationMANAGING CREDIT101 TM %*'9 [[[ EPXEREJGY SVK i
MANAGING CREDIT101 TM i This book is intended as a general guide to the topics discussed, and it does not deliver accounting, personal finance, or legal advice. It is not intended, and should not be used,
More informationCredit Cards, Loans, and Debt
Credit Cards, Loans, and Debt 1 CREDIT CARDS, LOANS, AND DEBT PRE-READING QUESTIONS 1. Do you have any credit cards? Which ones? 2. How often do you use your credit cards? What do you buy with them? 3.
More informationEcon 202 Section 4 Final Exam
Douglas, Fall 2009 December 15, 2009 A: Special Code 00004 PLEDGE: I have neither given nor received unauthorized help on this exam. SIGNED: PRINT NAME: Econ 202 Section 4 Final Exam 1. Oceania buys $40
More informationAre you in debt? Do you need to sell your house fast? Then Read on to find out How To Get Out Of Debt Now!
Are you in debt? Do you need to sell your house fast? Then Read on to find out How To Get Out Of Debt Now! When you miss mortgage payments you can find yourself in deep trouble. The mortgage lender could
More informationCONTENTS AT A GLANCE. CH 1. Driving and Trading Similarities. CH 2. Basic Concepts Related to Forex Driving
CONTENTS AT A GLANCE Introduction Preface CH 1. Driving and Trading Similarities The Forex Driver Analogy Forex Driving School Basic Competency and Expert Handling Trading for Income The number of Forex
More informationYou Can Take That to the Bank!
You Can Take That to the Bank! GRADE LEVEL: 9-12 TIME ALLOTMENT: 2 3 45-minute class periods OVERVIEW: Using video segments from the PBS series The Ascent of Money, this lesson teaches high school students
More informationINTEREST FREE NON REPAYABLE BUSINESS FUNDING. Charles Brooks Comprehensive BusinessManagement Ltd www.cbmgroup.co.uk
INTEREST FREE NON REPAYABLE BUSINESS FUNDING Charles Brooks Comprehensive BusinessManagement Ltd www.cbmgroup.co.uk 1 INTRODUCTION If you ve ever been involved in a start up venture you can probably remember
More informationResearch. What Impact Will Ballooning Government Debt Levels Have on Government Bond Yields?
Research What Impact Will Ballooning Government Debt Levels Have on Government Bond Yields? The global economy appears to be on the road to recovery and the risk of a double dip recession is receding.
More informationWILL REVERSE MORTGAGES RESCUE THE BABY BOOMERS?
September 2006, Number 54 WILL REVERSE MORTGAGES RESCUE THE BABY BOOMERS? By Andrew D. Eschtruth, Wei Sun, and Anthony Webb* Introduction Many of today s workers are at risk of having insufficient resources
More informationReading the balance of payments accounts
Reading the balance of payments accounts The balance of payments refers to both: All the various payments between a country and the rest of the world The particular system of accounting we use to keep
More informationRomans 13:8 is an often misunderstood verse because it says, Owe nothing to anyone.
Debt and Credit Introduction We will be discussing the subject of debt from a biblical perspective. But before we begin looking at biblical principles concerning economics and finances, we need to put
More informationHOW DO SMALL BUSINESSES OPERATE
HOW DO SMALL BUSINESSES OPERATE Sources of Finance and Advice N4 BUSINESS IN ACTION N5 UNDERSTANDING BUSINESS LEARNING INTENTIONS AND LEARNING INTENTION: I understand the SUCCESS CRITERIA different sources
More informationChina's Concerns - A Case Study
Feared God Plutus Strikes American Debt Having a good economy is really important for a country because that determines whether you are wealthy or not. One of the main reasons for why a country develop
More informationHOME EQUITY LINE OF CREDIT
Creditor: STANFORD FEDERAL CREDIT UNION HOME EQUITY LINE OF CREDIT This disclosure contains important information about our Home Equity Line of Credit. You should read it carefully and keep a copy for
More informationWeb. Chapter FINANCIAL INSTITUTIONS AND MARKETS
FINANCIAL INSTITUTIONS AND MARKETS T Chapter Summary Chapter Web he Web Chapter provides an overview of the various financial institutions and markets that serve managers of firms and investors who invest
More informationThe Solution is the Problem
11 LP May/June 2009 Special Issue The Solution is the Problem MARKETS AT A GLANCE Eric Sprott David Franklin The US government raised $705 billion worth of new debt in 2008. The debt was raised to pay
More informationOne Hundred Tenth Congress of the United States of America
H. R. 5715 One Hundred Tenth Congress of the United States of America AT THE SECOND SESSION Begun held at the City of Washington on Thursday, the third day of January, two thous eight An Act To ensure
More informationCurrency and Exchange Rates
Grade Five Currency and Exchange Rates Overview Students share the book The Story of Money, by Betsy Maestro, to learn about exchange and barter, the functions of money, currency, and spending money. Students
More informationBond Mutual Funds. a guide to. A bond mutual fund is an investment company. that pools money from shareholders and invests
a guide to Bond Mutual Funds A bond mutual fund is an investment company that pools money from shareholders and invests primarily in a diversified portfolio of bonds. Table of Contents What Is a Bond?...
More informationThe History of Crisis. Background Information: The Financial Crisis and Fair Value
The History of Crisis What is going on? Privatisation of money supply Financialisation: commodification of money and debt (linked to accounting) Deregulated global flow of capital (but not labour) (linked
More informationLecture 4: The Aftermath of the Crisis
Lecture 4: The Aftermath of the Crisis 2 The Fed s Efforts to Restore Financial Stability A financial panic in fall 2008 threatened the stability of the global financial system. In its lender-of-last-resort
More informationCash and Credit EPISODE # 109
Cash and Credit EPISODE # 109 LESSON LEVEL Grades 4-6 KEY TOPICS Entrepreneurship Cash/Currency Credit cards Debit cards LEARNING OBJECTIVES 1. Become familiar with different methods of paying for purchases.
More informationDebt: The Good, The Bad, & The Ugly EPISODE # 402
Debt: The Good, The Bad, & The Ugly EPISODE # 402 LESSON LEVEL Grades 6-8 KEY TOPICS Debt management Budgets Compound interest LEARNING OBJECTIVES 1. Understand different types of debt. 2. Learn how budgets
More informationOnline LEI Lesson 2. Lesson 2 Savings Accounts and U.S. Savings Bonds LEARNING, EARNING
Online LEI Lesson 2 Lesson 2 Savings Accounts and U.S. Savings Bonds On l i n e L E I 17 2 Savings Accounts and U.S. Savings Bonds LESS 2 SAVINGS ACCOUNTS U. S. SAVINGS BDS Time Required Lesson Description
More informationThe Unsweet Sixteen. The Top 10 Factors Impacting the Economy in 2016. 2007 We are here > Treasury notes. Cash
The Unsweet Sixteen The Top 10 Factors Impacting the Economy in 2016 Ben Miller, CEO 2007 We are here > 2008 2009 Peak Best-Performing Asset Classes Commodities Recession Bottoming Recovery Expansion Treasury
More informationWhat is a Bank? Episode # 508
What is a Bank? Episode # 508 LESSON LEVEL Grades 6-8 Key topics Banking Credit & Debt Saving & Investing Entrepreneurs & Stories Ballroom dancers Polina & Nathan City Slips Katie & Susie Night Terrors
More informationFacts and Figures on the Middle-Class Squeeze in Idaho
Facts and Figures on the Middle-Class Squeeze in Idaho For hard-working, middle-class families all over the country, life during the Bush presidency has grown less affordable and less secure. President
More informationPromissory Note Comparison Guide
Borrowing from or lending money to a friend or colleague is a sensitive situation. A lender wants to be sure money is returned on a timely basis. A borrower wants enough time to repay the amounts and some
More informationConsolidation causes little austerity
MPRA Munich Personal RePEc Archive Consolidation causes little austerity Ralph S. Musgrave 25. October 2011 Online at http://mpra.ub.uni-muenchen.de/34295/ MPRA Paper No. 34295, posted 25. October 2011
More informationDebts and Capital Gains Tax
Helpsheet 296 Tax year 6 April 2013 to 5 April 2014 Debts and Capital Gains Tax A Contacts This helpsheet explains: how debts are dealt with for Capital Gains Tax purposes how you may be able to claim
More informationLesson 12 Take Control of Debt: Not All Loans Are the Same
Lesson 12 Take Control of Debt: Not All Loans Are the Same Lesson Description This lesson examines the features of a loan with a fixed period of repayment (term loan). After distinguishing these loans
More informationDEBT MANAGEMENT ADVICE, PRODUCTS AND SERVICES
DEBT MANAGEMENT ADVICE, PRODUCTS AND SERVICES ADVISORY SERVICES TRAINING AND OUTREACH RESEARCH AND RESOURCES THE WORLD BANK 1818 H STREET, NW WASHINGTON, DC, 20433 USA DEBT MANAGEMENT ADVICE AND SUPPORT
More information2. Definitions of Terms
PUBLIC DEBT LAW I. GENERAL PROVISIONS 1. Subject of the Law Article 1 This Law regulates conditions, manner and procedure under which the Republic of Serbia (hereinafter referred to as: the Republic) may
More informationMarch 19, 2014 The President s Budget in Pictures By Jasmine Tucker Chart assistance by Daniel Gautreau
nationalpriorities.org research@nationalpriorities.org (413) 584 9556 March 19, 2014 The President s Budget in Pictures By Jasmine Tucker Chart assistance by Daniel Gautreau President Obama recently released
More informationProposed Information Statement Reverse Mortgage. Things you should know about your reverse mortgage
Page 1 of 7 Proposed Information Statement Reverse Mortgage Things you should know about your reverse mortgage This statement is provided to you because reverse mortgages operate differently to other credit
More informationDebt, Deficits, and the Economy. John J. Seater
Debt, Deficits, and the Economy John J. Seater When conversation turns to the economy, one of the most popular topics of discussion is the government deficit. Newspaper columnists, TV pundits, and of course
More informationRequest for Information Regarding an Initiative to Promote Student Loan Affordability
This Request for Information is scheduled to be published to the Federal Register in late February. In the meantime, please send comments via email to studentloanaffordability@cfpb.gov Billing Code: 4810-AM-P
More informationMULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
Chatper 34 International Finance - Test Bank MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The currency used to buy imported goods is A) the
More informationSo You Want to Borrow Money to Start a Business?
So You Want to Borrow Money to Start a Business? M any small business owners cannot understand why a lending institution would refuse to lend them money. Others have no trouble getting money, but they
More informationWhat s on a bank s balance sheet?
The Capital Markets Initiative January 2014 TO: Interested Parties FROM: David Hollingsworth and Lauren Oppenheimer RE: Capital Requirements and Bank Balance Sheets: Reviewing the Basics What s on a bank
More informationInvesting in mortgage schemes?
Investing in mortgage schemes? Independent guide for investors about unlisted mortgage schemes This guide is for you, whether you re an experienced investor or just starting out. Key tips from ASIC about
More informationPRACTICE- Unit 6 AP Economics
PRACTICE- Unit 6 AP Economics Multiple Choice Identify the choice that best completes the statement or answers the question. 1. The term liquid asset means: A. that the asset is used in a barter exchange.
More information