One of the alarm signals of a bad economy is a high unemployment rate. The unemployment rate of a nation is used to gauge its development. Thus, when the unemployment rate of a nation is high, the international perception for that particular nation becomes greatly affected, causing investors to stay away. Naturally, when there are few investors banking on a nation, that nation will suffer from a financial crisis, resulting in a bad economy. Other factors that can damage a nation’s economy include high inflation rates, volatile markets, terrorist attacks, threats of civil or world war, and many others.

The usual reaction of people when they find out that the economy is bad is to panic. This is understandable considering the role of economics in determining their financial future. Many things are at ... Read more »