Bank first Essay Example | Topics and Well Written Essays - 500 words

Bank first - Essay Example381- 384).Factors that influenced demand curve of houses to shift to the right be increased disposable income through mortgages and a consequential demand level. This increased the aggregate demand to raise the equilibrium price (Boyes and Melvin, p. 49- 50).Factors that caused a shift in supply curve are reduced consumers financial capacity, the legal provision for foreclosures and the reduced number of people who could buy the available homes. This had an effect of laborious the equilibrium price (Boyes and Melvin, p. 54- 56).The U.S. economy was at the depression stage during the housing crisis. This is because of the comparative condition that unlike previous poor economic conditions in which banks could resell foreclosed homes, the period was the worst, and such resale was not possible (Boyes and Melvin, p. 132).The economy is currently at the recovery stage, a stage that follows depression towards restructuring. The recovery period is also classifia ble by the transition that followed the crises such as regime initiative to save the banking sector through bailing them. The banking industry has however not reached its peak performance (Boyes and Melvin, p. 132).The government efforts to bail out the banks did not prevent depression. This is because it played a microeconomic role to a single sector of the economy instead of ensuring a blanket(prenominal) approach to the macroeconomic problem. This is however not the proper role of the government whose responsibility covers all sectors of the economy, including protection of consumers.The companys identified risk factors embroil inconsistency in economic and financial environment that sometimes adversely affect performance, lack of confidence in the governments ability to batten down a stable economic status, variation in interest rates that sometimes lowers