Macroeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506756
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Question
Chapter ST5, Problem 1CQ
To determine
Reason for the great recession of 2008-2009.
Expert Solution & Answer
Explanation of Solution
The recession of 2001 induces the Fed to adopt highly expansionary
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Students have asked these similar questions
Why did housing prices rise rapidly during 2002–2005? Whydid the mortgage default rate increase so sharply during 2006and 2007 even before the 2008–2009 recession began?
What caused the Great Recession of 2008 in the United States?
Assume that the housing market is in equilibrium in year 1. In year 2, the mortgage rate that banks charge consumers decreases, but producers are not affected. Which of the following is most likely to be the equilibrium change?
a
The equilibrium will be at point C before the change in expectations and point A after the change
b
The equilibrium will be at point A before the change in expectations and point B after the change
c
The equilibrium will be at point A before the change in expectations and point C after the change
d
The equilibrium will be at point E before the change in expectations and point C after the change
Chapter ST5 Solutions
Macroeconomics: Private and Public Choice (MindTap Course List)
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