What would happen to the economy if prime interest rates rose to 10% by 2007 ?

Answer 1

Lending activity would decrease forclosures would increase and vultures who have money would pick up the forclosed property's at a dicounted price.Entirely too many people take on to much debt all the while trying to keep up with the jonse's.people need to stop worrying about what other people think of them because noone is impressed with your big house and fancy cars that you financed to get them because you could not afford to buy them. Limit debt to 20 percent of your take home pay and you will be on your way to long term financial security.

Answer 2

Massive wave of mortgage foreclosures, causing plummeting real estate prices, causing still more foreclosures, causing banks to fail, causing massive federal bail outs, causing tax increases and cuts in social programs, failing schools, homelessness, angry mobs roaming the streets, class warfare, and finally the collapse of the nation. Mexico seizes the opportunity and invades, establishes provisional government, and a green zone in Houston. Better brush up on your Spanish...

Answer 3

I don't think it will rise to 10%. It is possible but hardly I can see it will. But if it will be 10% as you ask: economy will experience recession. Price of housing drops, many forclosure, stock market will drop, jobs will shrink. But the US$ will be strong though.

Answer 4

if that happend then everyone that is not rich would lose everything they own. Jobs would not compensate for such interest in a already crummy economy.

Answer 5

There would be a shutdown in the buying of homes well just about everything that you would have to get a loan on.

Answer 6

glad I don't have an adjustable rate mortgage

Answer 7

then the workers would be expecting pay to go up as well.

Answer 8

NOTHING GOOD ~ !