Do you think that people who “live beyond their means” display a character flaw by borrowing?

Choose 1 of the following questions to write about. Write up to 3 three paragraphs using no more than 600 words and use references. Use quotes rather than just citing a page number.

Here are your choices:

1. Some people claim that recessions are caused by excessive saving on the part of the public. When people decide to save more, they are deciding to buy less now. Won’t that cause some goods to go unsold? And won’t that cause producers to reduce their levels of output, laying people off and thus reducing their incomes, causing these people to buy less, thus setting off a downward spiral? How would you evaluate the claim that those who spend lavishly create prosperity while those who save bring on recessions?

2. How does the withdrawal of currency from checking accounts affect the money stock? How does it affect a bank’s reserves? How does this affect the bank’s ability to make loans? What effect might this withdrawal consequently have on the money stock?

3. Do you think that people who “live beyond their means” display a character flaw by borrowing? What about a government that fails to confine its expenditures to the amount of its tax receipts?

4. Describe what is meant by intangible wealth and is it important in an economy?

Last Completed Projects