Lecture 10 – The Great Recession

Vocabulary flashcards for Lecture 10 focusing on the Great Recession.

The Great Recession

Period from December 2007 to June 2009 marked by a significant decline in economic activity.

AD & AS Graph

Represents Aggregate Demand and Aggregate Supply. Used to illustrate the macroeconomic effects of the Great Recession.

Financial Crises

Situations in which financial institutions or assets suffer large declines in value.

Reinhart & Rogoff Study

Academic research on financial crises over the past 150 years. Provides historical context for understanding the Great Recession.

Leveraging

Using borrowed capital to increase the potential return of an investment. Contributed to the instability during the Great Recession.

Housing Bubble

A rapid increase in the valuation of real estate fueled by speculation. One of the key factors leading to the Great Recession.

Banking Collapse

Failure of banks due to bad loans and investments. A major feature of the Great Recession.

Government Bailout

Financial assistance provided by the government to prevent the collapse of key institutions. Refers to TBTF (Too Big To Fail) & TITF (Too Important To Fail).

Recessionary Gap in 2009

The difference between potential GDP and actual GDP, indicating underutilization of resources.

The Big Short

Movie that depicts the financial issues and events that occurred during the 2007-2008 financial crisis.