Question

John Iceland, Chapter 6: “The Great Recession.” In Poverty in America: A Handbook, 3/ed. Berkeley, CA: University of California Press, 2013

Note in the outline below, item III: Consequences of the Great Recession, select one of the three subsections (A, B, or C) and write a short summary.

Outline of Chapter 6: The Great Recession

1. Introduction
2. Causes of the Great Recession
3. Consequences of the Great Recession

1. Macroeconomic Effects
2. Effects of the Recession on Poverty
3. The Politics of the Great Recession

4. Conclusion

Answer 1

INTRODUCTION

Recession is term generally used for temporary decline in economic activity. As trade and industrial activity are reduced.

Great Recession was a period of economic activity decline in late 2000(S). It happened because of the collapse of US real estate market. Subprime mortgage crisis , global financial crisis and other policies lead to great recession of late 2000(s). It extended for 19 months.

A point worth noting is that not all countries suffered same degree of recession; developed countries suffered the most whereas the countries like India and China grew substantially in that period.

Causes of Great Recession

1) International trade imbalances

2)But main cause was real estate bubble ( Sub prime mortgage crisis) but when bubble burst economies fall into recession.

( ASSET PRICE BUBBLE - When the price of asset rises rapidly( or asset become overinflated) without underlying fundamental)

Consequences of great recession

EFFECT OF RECESSION ON POVERTY

Effect of recession was unusually hard on poor

Around 14.3 percent of Americans were living in poverty

people lost their homes as a result of subprime mortgage crisis.

low income people had higher unemployment.

Conclusion

conclusion could be that great recession cause had lead to ruin situation for US economy for short period of time. It had higher unemployment(job loss) fall in Real GDP, higher poverty burst of housing buuble.

ALL THE BEST :)))