How can the loan decisions of individuals and private bankers contribute to the instability in the macroeconomy

Loan decisions made by both individuals and banks contribute greatly to the macroeconomy. Since everyone participates in the macroeconomy at large everyone is in some way tied together in terms of the ability to get and control credit. From this perspective many banks were willing to loan money to individuals based on the assumption that even if they couldn't make the payment the increase in house values would be enough to cover any potential losses. The issue arose when too much credit was extended, housing slowed and then there was little demand for new houses. This started a cascade of issues in the macroeconomy in terms of a housing bubble, an end to easy credit and a situation in which individuals and banks both had to be bailed out in order to prevent a complete collapse of the macroeconomy as a whole.
While private bankers made the loans there are also individuals that take loans that they know they can't repay or don't plan for situations in which they can't make a payment if something were to go wrong in terms of their job or a family issues that may arise. For this reason individuals are also responsible at a microlevel for the problems created at the macro level as a whole for the economy. Such borrowing had to end immediately to stave off future failures of banks who may not have had the liquidity and solid financial backing to survive such a predicament.

1) i would probably get rid of my phone so i get extra money 2) it probably won’t because your would have to give up a lot but u need all the things u have3) your should probably not get the laptop and just save for college