Macroeconomics (Fourth Edition)
4th Edition
ISBN: 9780393603767
Author: Charles I. Jones
Publisher: W. W. Norton & Company
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Question
Chapter 10, Problem 1RQ
To determine
The effect of financial crisis on housing prices and stock market.
Expert Solution & Answer
Explanation of Solution
There was a huge decline in the housing prices during the years of financial crisis (from 2006 to 2012). The housing prices decreased from 160 in 2006 to 100 in 2012 or a 37.5 percent decline during these years. At the same time, there was a large decline in stock price from 2007 to 2009 (50 percent); after that time period, it started to upsurge. Therefore, the stock price recovered more than the housing prices during the period of financial crisis.
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Chapter 10 Solutions
Macroeconomics (Fourth Edition)
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