The Great Depression and unemployment Technology stocks and mortgage loans contributed in the in economic bubbles.
This so called “economic bubbles” occur when prices for stocks or securities rise above their actual values. The subprime bubble of 2006-2007 ended when borrowers were not able to continue paying subprime mortgage loans, loans to borrowers, who did not qualify with mainstream lenders. This resulted in a wave of foreclosures, with banks repossessing and selling homes in which buyers could not meet their payment obligations. According to The Almost Second Great Repression: The Road to a Global Economic Crisis. (1) this later led to The Great Recession. The Great Recession was the decline in economic activity. The loss in wealth led to the cutbacks in consumer spending. This lack of consumption led to the collapse of business investments. The collapse of business investments led to the decrease of employment. (The State of Working America: The Great Recession (3)) Unemployment was highly affected by the Great Recession. Higher unemployment rates serve as an indicator of a recession. According to Bureau of Labor on Statistics: The Recession of 2007–2009(2), in December of 2007, the national unemployment rate was 5 percent. It had been below that rate for over 30 months. In October 2009, couple of months after the recession ended, unemployment increased to 10 percent. The …show more content…
Citations
Economic Policy Institute. 2012 “The Great Recession”. The State of Working America, Washington, D.C.: Economic Policy Institute. Dec. 8, 2015. (1)
U.S. BUREAU OF LABOR STATISTICS 2012 "The Great Recession of 2007-2009." Washington, D.C. Dec. 8, 2015 (2)
Williams, Brian K., Stacey C. Sawyer, and Susan Berston. Business: A Practical Introduction. Boston: Pearson, 2013. Print.
This so called “economic bubbles” occur when prices for stocks or securities rise above their actual values. The subprime bubble of 2006-2007 ended when borrowers were not able to continue paying subprime mortgage loans, loans to borrowers, who did not qualify with mainstream lenders. This resulted in a wave of foreclosures, with banks repossessing and selling homes in which buyers could not meet their payment obligations. According to The Almost Second Great Repression: The Road to a Global Economic Crisis. (1) this later led to The Great Recession. The Great Recession was the decline in economic activity. The loss in wealth led to the cutbacks in consumer spending. This lack of consumption led to the collapse of business investments. The collapse of business investments led to the decrease of employment. (The State of Working America: The Great Recession (3)) Unemployment was highly affected by the Great Recession. Higher unemployment rates serve as an indicator of a recession. According to Bureau of Labor on Statistics: The Recession of 2007–2009(2), in December of 2007, the national unemployment rate was 5 percent. It had been below that rate for over 30 months. In October 2009, couple of months after the recession ended, unemployment increased to 10 percent. The …show more content…
Citations
Economic Policy Institute. 2012 “The Great Recession”. The State of Working America, Washington, D.C.: Economic Policy Institute. Dec. 8, 2015. (1)
U.S. BUREAU OF LABOR STATISTICS 2012 "The Great Recession of 2007-2009." Washington, D.C. Dec. 8, 2015 (2)
Williams, Brian K., Stacey C. Sawyer, and Susan Berston. Business: A Practical Introduction. Boston: Pearson, 2013. Print.