Microeconomics Essay Example | Topics and Well Written Essays - 500 words - 13

Microeconomics - Essay Example the loss incurred the bank has to pass forward the effect of this incident to its other customers which are charged higher interest rates on their future loans and their current money deposits receive a lower interest rate return. The money supply of the banks is also diminished due to event of a loan investment that is not recovered. Corporations in America follow similar financial decisions to individuals concerning their outstanding debt. Whenever market conditions are favorable corporations look for ways to refinance their debt. The difference between a corporation and individual is that companies utilize different mechanism to achieve refinancing. Corporate debt can be refinanced by utilizing a bond mechanism. A bond is commercial paper sold in denomination of $1000 to individuals or business which allows the corporation to raise money. The bonds have a fixed interest rate called the coupon rate. If market conditions changed corporation can issue a set of bonds at lower interest rate in order to eliminate its outstanding bonds and pay less money in the long run. Downgrading of debt occurs when the chances of recovering the outstanding debt diminishes because the debtor has not been paying their payment or time. If a loan goes beyond 90 days without a payment being received the debt is said to have gone in default. At this time the chances of collecting the money goes does down significantly. From the perspective of an outsider these financial assets of the bank represent a downgraded asset. The $700 billion bailout plan targeted these types of downgraded assets which the government would buy up to create greater liquidity in the banking system. Another way downgrading of debt occurs is when corporate debt such as bonds are downgraded by agencies such as Moody’s. Moody’s has a system which gives a grade to the commercial paper issued by banks and governments. If the organization is having financial problems the grade of their outstanding debt is

Do you believe the greatest leaders are born, not made Essay

Do you believe the greatest leaders are born, not made - Essay Example They should be full of charisma and inspirational to the society. Charisma in a leader is pushed by their ego and enables them to spread their doctrines to the people and be able to convince the society that they are superior to the others. A leader should inspire others on matters that pertain the well being of the society. Moreover, the leader should be self assured in order to make the society he/she is leading believe in them and that they can achieve anything (Truexpression, Para 3-4). Born leaders need to be able to anticipate the needs of the people even before they occur; hence a high level of vision needs to be portrayed. They should approach situations with an open mind and acts as a link to the other leaders in societies. They should be well prepared and hard workers, as they will be the mentors of the younger generations who may onetime become leaders. On the other hand, made leaders occur in several way for instance they may be gained through formal education in educational institutions or from experiences in their life. Other made leaders are gained from given situations that occur at a given time needing them to act and lead others. Most of the attributes of leaders who have little formal education comes from skills they gather as they live in their community. Made leaders mostly encourage teamwork through society they are leading as they believe in the power of unity. Made leaders are also excellent communicators, especially a situation leader who arises in the case of crisis to lead the society (Reeves, Para 5). Made leaders recognize the need to better themselves to be able to gain more insight and lead the community they serve. They recognize they are the servants of the people hence need to learn the needs of the community by building a strong bond with the people. Born leaders mostly learn from their experiences or that of others (Truexpression, Para 9). This makes them eager to better themselves and not repeat the