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Role of Business Cycle to Understand the Recession

   

Added on  2020-04-07

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Running head: ECONOMICS FOR MANAGERSGREAT RECESSION IN USA: ITS CAUSESName of student:Name of UniversityAuthors note:
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1GREAT RECESSION IN USA: ITS CAUSESExecutive summaryThis report aims to focus on causes behind the recession that broke during 2007 to 2008in USA and report shows why US economy was largely influenced due to recession. Study alsoconsidered GDP and Unemployment rate of USA to assess the effect of recession on theeconomy. The results found in the study shows that elements like housing market bubble, stockmarket crash, credit default, low interest rate dumping from china are the main reasons behindfinancial crisis.
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2GREAT RECESSION IN USA: ITS CAUSESTable of ContentsIntroduction......................................................................................................................................4Discussion........................................................................................................................................4Role of Business Cycle to understand the recession...................................................................5Causes of Recession in USA.......................................................................................................6House market bubble...............................................................................................................6Stock market Crash..................................................................................................................8Credit default Swap situation...................................................................................................9Excessive debt at private level...............................................................................................10Dumping from China.............................................................................................................11USA GDP affected due to recession..........................................................................................12USA Unemployment rate due to recession................................................................................13Conclusion.....................................................................................................................................13References......................................................................................................................................15
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3GREAT RECESSION IN USA: ITS CAUSESIntroductionFinancial crisis is a situation which is outcome of several factors, it mainly shows hugeloss that is faced by an economy or country. The global financial crisis of 2007 to 2008 ismarked as one of the contraction period of the world and this situation affected many countries.The main reasons behind any financial crisis are crashes of stock market, bursting of financialbubbles, devaluation of currencies and credit defaulters. Countries which are affected byfinancial crisis of 2007 to 2008 took a huge time to recover its losses and have recorded evennegative growth during that period. The recession which was observed during this period ofglobal financial crisis was very large and affected all the sectors of the economy and as a resultof this country that are affected by global financial crisis suffered a large extent of loss.Among the countries that were affected by recession during 2007 to 2008, USA stands ina visible position. The extent of loss suffered by US economy was very large and all theeconomic indicators of the country was affected as a result of this recession. During this periodUS economy recorded negative growth and economy even showed sluggish growth after therecovery from this period.The main aim of this report is to explore the reasons that are liable for occurring of thegreat recession in USA during 2007 to 2008. Paper focused on the core causes and their effect oneconomy. The effect of recession economic indicators are also considered in this report.DiscussionRecession shows a significant decline of economic activities across the economy. It ismainly observable when an economy records negative growth in two consecutive quarters. In
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