ECON 3430 Chapter Notes - Chapter 1: Monetary Policy, Vehicle Insurance, Business Cycle

• School: York University
• Department: Economics
• Course: ECON 3430
• Professor: Brenda Spotton- Visano

Document Summary

Fall in us housing prices were the result of financial institutions afraid that borrowers would default on their mortgages. In canada, borrowers who relied on the short-term loan market were unable to borrow as lenders feared that the collateral they were offering included (perhaps worthless) In 2008, the crisis gradually worsened as u. s. banks declared significant losses, and in. The canadian banks were relatively unscathed but the canadian economy too went into a deep recession. In 2009, it was clear that the financial crisis had spread around the globe and had caused a recession more serious than any since the great depression in the 1930s. The financial system has 5 parts: money, financial instruments, financial. We use money, to pay for our purchases and to store our wealth. We use financial instruments, to transfer resources from savers to investors and to transfer risk to those who are best equipped to bear it.