Chapter 13.4, Problem 2R

To determine

To discuss: The ways in which the major events affected the nation’s economy.

Explanation of Solution

The way in which each of the listed events affected nation’s economy are as follows:

Event	Effect
Depression	The period of depression in 1929 hit the nation badly and its almost destroyed the economy of United States. It caused failure of banks and business which led to increase in unemployment. This further caused homelessness and decrease in production activities. The GDP declined by 30%.
WWII	The World War II affected the economy of United States badly. It created a situation of economic depression where economic activities slowed down, and GDP declined.
Tech boom	The technological boom in 1920s, 1960s and 1990s was a period of prosperity for the economy. Technological advancements in business caused increase in production activities and improved the financial health of the economy.
9/11	The attacks of 9/11 increased the effect of 2001 recession. There were lot of economic damages as markets saw a sharp drop and there were huge insurance losses.

Table (1)

Economics Concept Introduction

Introduction:

Economic fluctuations- There are many factors that influence the economy continuously. The factors like inflation, depression, fluctuations in business, period of peak and boom effect the economy.

Depression- This is a period where business activities see major slowdown. This is a bad case of recession. In this situation, major loss in business and banking activities can be seen and economy operated below its capacity.