PSCI150 Lecture 8: W8 - The Financial Crisis
Document Summary
Psci 150: the 2008 financial crisis: causes and. The allocation of assets and liabilities under risk and uncertainty: capital refers to the funds that organizations use towards the production of goods or the provision of services, capital consists of equity (ownership) and debt. Having access to money is helpful for: supporting short- and long-term welfare, hedging against rainy days", accumulating funds for large purchases and life events . Finance sectors role in national gdp has been increasing. Greece at the top of government debt, then italy, portugal, ireland, spain, euro area etc: china and japan are the top owners of u. s national debt. What makes international finance special: foreign exchange and political risks. States can change the rules of the game : expanded set of opportunities. Invest where the return is greatest and taxation is the least. Costs of doing business abroad do exist (at the very least, transportation and shipping costs!)