Question

1. What is the good and bad of the stock market being down?

2. Is it good or bad for the government to give out $1 trillion dollars?

3. Where does that money come from?

(please list some short answers :) )

Answer 1

1. What is the good and bad of the stock market being down?

Good

a) Prices are corrected and may be signalling the right value

b) There is higher scope for return for a fresh investor in the market as the potential upside is higher.

Bad

a) Bad for firms raing fresh equity from the market due to depressed prices

b) Existing investors would be punished with lower returns

2. Is it good or bad for the government to give out $1 trillion dollars?

If the economy is going through a bad patch ie recession, a way to pump prime the economy is by stimulating it with investment (ie public). Goverment pump priming would improve the confidence in the market for inviting more private investment and growth. So it is good if the government wants to generate confidence in a recessionary scenario but bad if the money is used to bail out private firms as it is tax payer money

3. Where does that money come from?

Money comes from either tax payer money or printing of currency by the fed.