2006-12-14 17:39:21 · 5 answers · asked by Anonymous in Social Science ➔ Economics
The value if that countries money (ex. Dollar) decreases to a very low rate. Right now the Euro is 1.27 to every american dollar. If the U.S. economy crash the ratio would be more like 4 to every american dollar making the U.S. in great damage.
2006-12-17 04:51:26 · answer #1 · answered by pay2368 3 · 1⤊ 0⤋
When an Economy crashes nothing happens much except formation of anarchical activities, antisocial activities, loss of welfare, poverty increase, unemployment on the rise etc;. Usually countries with Centra Bankd don't crash that easily, Argentina is no exception and even African countries. These people don't have Central Banks. Usually World community and Institutions interfere and try to set right things in such cases.
2006-12-15 03:50:57 · answer #2 · answered by Mathew C 5 · 1⤊ 0⤋
People will go hungry, unemployment rises to 20% or more, banks become stagnant, trade slows, capital diminishes... pretty much a bad time for everyone. Best recent example would be Philippines. They were actually doing much better than most of the developing Asian nations, but one day they just crashed. It was a crash that most East Asian nations faced, but they had it worse. Now, they are coming back stronger than ever, but early 90's were bad time for them.
2006-12-14 17:51:49 · answer #3 · answered by wat~ 3 · 0⤊ 0⤋
This happens when wants of the country and its people are more than means of the country and its men. It is a temporary phenomenon. Any of the following come into paly. Current wants are changed to future wants, cheaper wants substitute costlier wants, future means are converted into current means, say borrowings, deficit budgeting etc, and the result will be equilibrium state. True equilibrium is also not desirable. There should be a gap between wants and means but it should be narrow. The narrower the gap between wants and means, say as in the case of developed countries, more will be economic activity and if the gap is wide as in the case of underdeveloped countries, there will be slowing down of economic activity. It is my advise that resort to deficit budgeting and borrowings so as to narrow down the gap to overcome the economic crash. Remember: according to Law of Conservation of Wealth, wealth can neither be created nor can it be destroyed but can be changed from one form to another( Remember basics of Double entry bookkeeping).
2006-12-14 23:59:50 · answer #4 · answered by bvgopinath2001 4 · 0⤊ 0⤋
Hm... Let me give you a real-world example - just have a look at the economic crisis in Argentina in the end of the '90s. You may check the Wikipedia.
Website: wikipedia.org
2006-12-14 19:39:30 · answer #5 · answered by here_4_ya 2 · 0⤊ 0⤋