Chapter 12, Problem 12Q

To determine

Two similarities and two differences between the United States experiences during the Great Depression and the Great Recession financial crisis of 2007-2009.

Concept Introduction:

The Great Recession is a term that represents the sharp decline in economic activity from December 2007 to June 2009 and the ensuing global recession in 2009. The economic slump began when the U.S. housing market went from boom to bust, and large amounts of Mortgage-backed securities and derivatives lost significant value. Great Depression occurred during the 1930’s and it featured GDP decline of more than 10 percent and an unemployment rate which reached 25 percent. The term recession refers to a period of six months where an economy suffers a fall in output or a big contraction in output (GDP), employment, investment, and confidence. The term depression means a prolonged downturn in the economy and where a nation’s GDP falls by at least 10 percent.