1. Can you think of any financial innovation in the past ten years that has affected you personally? Has it made you better off or worse off? Why?
Financial innovation has huge impact on our society. Those innovation are mostly making financial problems easier to deal with. For example ATM, e-banking… Financial innovations are saving a lot of transaction costs. For me the best innovation was ATM. Where ever you go you can pull out you money from ATM little fee if you are not using your bank ATM machine. I am a student studying abroad, for me it was a big necessity to have international visa card to get my tuition, pocket money from my parents who leave in a different country. ATMs are very convenient to use, they are fast and no one else can know how much I have in my account (as a privacy). As another innovation is e-banking. I can check my balance through internet. Really safe and convenient.
2. What affect might a rise in stock prices have on consumer’s decision to spend?
If stock price goes up than consumer’s willingness to spend would also increase, because the return(dividend) is going to be high too. The wealth that people were afraid to invest will be pushed upon the market. When an institution who are selling stocks they raise their stock price when they see that in the future they are going to make more money. That's why they are build a fund to invest their new project. But there are also lots of people without wealth they will stay the same.