Answer on Economics of Enterprise Question for LaMarcus Streeter
Despite the criticism that felt upon S&P for belated and vague prognosis, this incident undermined a position of the U.S. as a world’s leading economy. Most probable effects that it is likely to entail are:
1) redistribution of government spending to real sector of economy rather than to financial markets;
2) more profitable conditions for home producers for entrepreneurship;
3) relocation of production facilities from South-Eastern Asia back to United States of America;
4) social payments curtailment;
5) lower expenditures on capital-intensive sectors (e.g. exploration of space, military operations) or even shutdown of unprofitable sectors of economy.
& Global economy may shift to other currencies, such as Swiss franc, for some time, as U.S. dollar’s role as a world currency is argued these days. As of January 2012, there are 14 countries that have their government bonds rated AAA by S&P, for instance, Canada, Sweden and Germany.
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