Domino Effect

1. How is the "domino effect" affecting the global economy?
It is affecting Global economy because global banks stopped lending to each other. Britain was forced to save many banks, spending $865 billion dollars.

2. What caused the U.S. housing crisis?
Many lenders gave high risk to people with low incomes. Then people could not pay back their loans.

3. Why is the cut in consumer spending a serious pr0blem?
It is a problem because consumers account for more than two-thirds of the nation’s total economic activity.

4. How is less spending affecting local and state governments?
It has caused a drop in sales and tax revenue. More than half of 50 states have cut spending, raised taxes, or used emergency funds to balance their budgets.

5. What trend does expert Brian Sack predict for the economy?
Brian Sack said “It’s hard to see how we avoid a recession”. “it could prove a tough one to climb out of”.

6. What have the worlds key central banks done to stop the crash?
The worlds key central banks are working together to stop the crash.