ECO215 Assignment: Impact of Global Financial Crisis on Economies

This economics assignment analyzes the impact of the global financial crisis on modern economies. The assignment explores the role of financial institutions, including banks, and how the crisis has influenced demand, supply, and policymaking. It highlights the impact on exchange rates and international trade, particularly focusing on the challenges faced by developing countries. The study examines the responses of organizations like the WTO and GATT and discusses the effects of the crisis on industries and employment. The assignment concludes by emphasizing the importance of monetary policies and exchange rate stability in navigating economic challenges. The assignment is based on a blog post format discussing a current economic issue relevant to managerial economics.

Running head: Economics Assignment
Economics Assignment
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1Economics Assignment
Introduction
The article is mainly showing the impact of the financial crisis that are being faced by
the modern world. Through the global financial crisis, most of the institutions in the form of
WTO and GATT need to identify the problems that are mainly associated with the global
financial crisis. The study will highlight the demand supply problems that are mainly
associated with global financial crisis and how the decision making system is being nurtured
by the policymakers.
Discussion
In the modern world of business, the banks and other financial institutes is playing
significant role in developing and rolling out the money into better level of resource making
abilities. In most parts of the developed nations, the corresponding banking is playing huge
role in the development of financial resources. The consequence of global financial crisis is
mainly going to increase the rate of growth of going to bank more number of times. The
global financial crisis in the year 2008, has forced the policymakers to bring policies that will
develop the overall demand of the consumers. The global financial crisis in the year 2008,
rattled the banking functions that has deeply enabled most of the country to redefine their
financial strategies.
Now most of the developed and developing nations are relying heavily on the exports
of the goods that are being produced within the geographical boundary and continuous global
financial crisis is mainly impacting heavily on the exchange rate. The devaluation of the
currency is mainly impacting the consumers demand as the money that is available within the
banks is not up to the mark of consumers to satisfy their demand (Ineteconomics.org, 2019).
Due to insignificant terms of trade, some of the developing countries face tough challenge

2Economics Assignment
regarding the exports of their products. Now due to lack of supply in the goods within the
urban cities are increasing price of some of the commodities.
The global financial crisis is more actively impacting industries that are mainly capital
based in nature. This is an important concern as the developing countries are facing huge
amount of debts from the institutions like World Bank and IMF and this is actively impacting
on the terms of trade and volume of international trade is gradually decreasing. The WTO and
GATT is being forced to remove the barriers of international trade in DOHA round and they
are claiming to make trade free of quotas and tariffs. Removal of quotas and tariffs will
obviously help the developing nations to flourish their exports and imports. Due to global
financial crisis, companies like Lehman brothers, General Motors have gone bankrupt and
had to stop their production in the mid-way and huge number of employees had to fire off.
The US Federal Reserve injected $236bn (then, £117bn; now £152bn following the pound's
collapse) into the American banking system in the second week of global financial crisis and
it has been seen that even World Bank and IMF came to the rescue operation (The guardian,
2019).
Conclusion
The study is successfully concluding that impact of global financial crisis is strong
and the impact of the resource distribution is mainly helping the development of policies
around the globe. Continuous improvement in the monetary policies have settled the
exchange rate of the world economy. This is an important aspect in the sense that through
better and effective level of exchange rate the economy is finding route to stability.

3Economics Assignment
Reference list
Ineteconomics.org. (2019). Financial Markets Have Taken Over the Economy. To Prevent
Another Crisis, They Must Be Brought to Heel. Retrieved from
https://www.ineteconomics.org/perspectives/blog/financial-markets-have-taken-over-
the-economy-to-stop-the-next-crisis-they-must-be-brought-to-heel
The guardian. (2019). Three weeks that changed the world. Retrieved from
https://www.theguardian.com/business/2008/dec/28/markets-credit-crunch-banking-
2008

4Economics Assignment
Reference list