![]() "Recession Effects on Small Scale Industry." Small Business. "How the Global Economic Meltdown Affected Small-Scale Businesses." Business & Entrepreneurship. "How Global Economic Meltdown Affects Small-scale Businesses." Natacha Maheshe. Quadri, Sana, Rebecca Derby, and Grace Hardwick. "Borrowing and the Federal Debt." National Priorities Project. "Global Economic Crisis." Global Economic Crisis. "6 Factors That Point to Global Recession in 2016 | Investopedia." Investopedia. The legal system should encourage property rights to be implemented within small-scale businesses to improve their standing at central banks. More research and development should be implemented to reduce unnecessary spending and borrowing. Government should focus on building infrastructure. ![]() Public education should be provided to all to build a stronger, more educated work force. Ī variety of policies should be set to reduce the negative consequences resulting from this current global economic meltdown. Within the capital market, investments will decrease as a consequence of savings decreasing. Due to this decrease in productivity, labor demand decreases which causes the real wage and consumption to decrease as a result. These temporary effects cause negative productivity shocks within the economy. This reduction of funds results in small businesses having to reduce their employment force due to the lack of resources to maintain a higher number of employees. This occurrence of reduced loans for smaller businesses has become a larger problem within recent years as sole proprietorships are already presented with a larger difficulty in the receipt of loan payments. Within the year of 2011, the amounts of loans given by central banks were reduced by an astonishing 11 percent due to this period of recession. Due to financial problems within the economic meltdown, these banks are much less likely to approve loan offers to smaller companies due to their existing struggle to stimulate the economy. Smaller companies have a great financial dependency on central banks. These businesses generally defined as consisting of a maximum of 500 employees. Small scale businesses are largely affected by the consequences of the global economic meltdown. The debt ceiling within the United States has been raised over 70 times which has been the government’s way of avoiding the current financial problem rather than addressing the issue. Large deficits have been a result of this repeated borrowing. Consequently, investors lost their intial investments. The United States had been financing an excessive amount of money from foreign countries, especially Asia, resulting in the default of several US borrowers mostly on their mortgages as they become unable to pay back the amount borrowed. The current global economic situation is in a condition worse than that of the Great Depression through its repeated bank failures, layoffs and defaults occurring throughout the world. ![]() Several factors have contributed to the current global economic crisis including the current debt crisis in Europe and the US, continuously increasing debt through student loans, substantial drops in retail sales and the increasing struggle of central banks to stimulate the economy.
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