The contribution of Consumer Financial Illiteracy towards 2008 Mortgage Meltdown

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TABLE OF CONTENTS

CHAPTER 1: INTRODUCTION1

1.1 Overview of the topic1

1.2 Problem Statement2

1.3 Research Questions2

1.4 Significance of the Study2

CHAPTER 2: LITERATURE REVIEW3

2.1 History of the financial position in USA3

2.2 Current Financial Condition of USA4

2.3 Future of the US Economy5

CHAPTER 3: METHODOLOGY7

3.1 Overview of the Research Methods7

3.2 Research Hypothesis7

3.3 Instruments for Data Collection7

3.4 Ethical Concerns for the Research8

CHAPTER 4: DISCUSSION AND ANALYSIS9

4.1 Overview of the Results9

4.2 Analysis of the Data9

CHAPTER 5: CONCLUSION12

5.1 Summary of the topic12

REFERENCES13

CHAPTER 1: INTRODUCTION

1.1 Overview of the topic

The state of the United States economy in America today is not as strong as it has been during various periods of the country's history. There has been a chain of events over the last seventy years in America that has brought the country through a series of financial miscues launching it into the financial crisis that it now finds itself in. The financial difficulties that are now facing this country are very similar to problems faced by countries around the world. Potential problems include, but are not limited to: hyperinflation effect on money, a collapse of the middle class, a propensity of the public to overspend and under-save, ballooning national and personal debt, and a general sense that financial doom is inevitable.

The problems facing the United States today are very similar to financial problems that Germany faced in the 1930's. The issues related to the consumer illiteracy also carry a lot of value for the Americans living in the country. There were several mistakes made by the Americans in the subsequent years from the period between 2003 to 2008. The consumers did not have a proper knowledge of the financial mortgage and they kept on making wrong decisions. This particular step proved to be detrimental for these consumers because they suffered a massive financial loss during the crisis. This is the reason why the entire literature is based on the issue related to the consumer financial illiteracy towards the 2008 Mortgage Meltdown. Therefore, all the issues related to the topic will be discussed in detail.

Problem Statement

The major objective of the topic is to assess the role of consumer financial illiteracy towards the 2008 Mortgage Meltdown.

Research Questions

The research questions for the study are:

What is the definition of consumer illiteracy?

What was the role of consumer financial illiteracy towards the mortgage crisis in 2008?

What measures are needed to prevent this situation in future?

What is the best strategy needed to meet the issues related to Consumer Financial Illiteracy and the 2008 Mortgage Meltdown?

Significance of the Study

The significance of the study is quite high. The reason is that there is a need to assess the contribution of Consumer Financial Illiteracy towards the 2008 Mortgage Meltdown. The financial crisis that occurred in the USA created a lot of problems for all the people living in the country. They got bankrupt and suffered a major financial setback which was a major issue for all these people. The consumers must have extensive knowledge about the ...