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aggregate demand will decrease, lowering both real GDP and the price level

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MeGustaCulo

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Q: Concern about an international crisis has caused consumers to save their money and postpone big purchases. What is the effect on aggregate demand and aggregate supply?
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When is bargaining power of buyers stronger?

Bargaining Power of Buyers StrongerBuyer switching costs to competing brands or substitutes are lowBuyers are large and can demand concessionsLarge-volume purchases by buyers are important to sellersBuyer demand is weak or decliningOnly a few buyers existsIdentity of buyer adds prestige to seller's list of customersQuantity and quality of information available to buyers improvesBuyers have ability to postpone purchases until laterBuyers threaten to integrate backward.I strongly recommend to read about the Five competitive Forces by Porter.


What are two possible options to postpone your loan payments if you get into financial trouble?

Deferment or Foreberance


How does a student loan forbearance affect your credit score?

A loan in forbearance permits a student to temporarily postpone their federal student loan payments. Or, the forbearance temporarily reduces the amount the student pays. Your students loans may show up on your credit report while in repayment status or out of deferment.


If the primary borrower passes away is the co-borrower responsible for the loan?

Yes, a co-borrower is liable and responsible for a joint debt. Understanding the process may help. When you finance a vehicle, you are not "buying a car". You are borrowing money that is secured by a car. This is why the creditor insists that you have insurance during the term of the loan. They know that consumers don't understand this concept and that if the car gets wrecked or stolen they will not want to repay the loan. Giving back the car would cause the account to be notated as a "voluntary repossession". The vehicle might be sold at auction and any remaining balance on the loan would be shown on your credit report as a charge off or collection account. This is a significant derogatory entry on a consumers credit report. You should avoid this, as it may hinder you from getting another vehicle loan or other credit in the future. See if you can sell the car yourself and pay off the balance of the loan. Contact the creditor and inform them of the situation, see if they will allow you to postpone payments, (with no derogatory information showing on your credit bureau file) while you attempt to sell the car.


Can you stop a foreclosure once sale date is set?

Yes. There are generally 3 ways to halt or postpone the sale: 1) File bankruptcy 2) Negotiate with the lender for a postponement. This is usually done to allow time to work on a loan modification. 3) Take legal action against the lender. If you have legal basis, you may file suit or complaint against the lender for fraud, breach of contract or procedural errors that would cause the sale to be postponed. Remember that unless you will ultimately be able to afford the home, these are merely going to postpone the inevitable. If you are trying to buy time in the home these methods may work, but may further damage your credit (additional late payments reporting). There have been cases where borrowers negotiated with their lender for postponements repeatedly and successfully for over a year, sometimes 2 or more.