WEEK 7 MACROECONOMICS ASSIGNMENT

1)
The Silicon Valley Bank crisis showed a few weaknesses in the financial system such as:

 Lack of effective regulation

 Oversight
 Risk management
 Prediction
 Clientele
 missing CRO

Silicon Valley Bank was known for working with young tech start-ups that other banks may
have shunned. When those start-ups flourished, SVB grew alongside them. experienced
significant losses due to its exposure to the dot-com bubble. As a result, SVB faced a liquidity
crisis and was unable to meet its obligations to depositors and investors.
policymakers implemented several measures aimed at improving financial stability, promoting
saving and investment, and preventing future crises. There are a few including:

 Strengthened regulatory oversight

 Improved transparency and disclosure
 Enhanced consumer protection
 Promoting savings and investment
The subsequent policy responses aimed to address these weaknesses and promote financial stability,
while also encouraging saving and investment and protecting consumers from abuse.
2)
The high savings rate has provided a large pool of capital that can be used for investment in
infrastructure, manufacturing, and other industries, which has fueled economic growth. Trade
liberalization was also a major key to China's economic success. Removing trade barriers encouraged
greater competition and attracted FDI inflows. Government promoted policies so there are low-
interest rates on bank deposits and restrictions on consumer credit. This has encouraged households
and businesses to save more and invest in productive assets.
China has become a key player in global supply chains, as many companies now rely on Chinese
factories for the production of goods. China's rapid growth has also created challenges for the global
economy. some economists argue that China's high savings rate has contributed to low-interest rates
and a buildup of debt in many countries.
3)
The government's efforts to build roads, ports, and power plants have created new investment
opportunities for both domestic and foreign investors, which have stimulated economic growth.
One of the main benefits of infrastructure development is that it attracts investment, which can
increase the level of saving in the economy. The creation of new infrastructure projects creates new
financing opportunities for banks, which can lend to both private and public sector borrowers.
The impact of infrastructure development on saving, investment, and the financial system in Indonesia
is generally positive. By increasing the country's productive capacity, infrastructure development can
support higher levels of economic growth and reduce poverty. Additionally, infrastructure
development can improve the overall quality of life for Indonesians by providing access to better
transportation, electricity, and other essential services.