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The Great Recession is the name given to the period of sustained decline in economic output experienced by many countries following the global financial crisis of 2007-2009. This downturn was a direct consequence of the widespread instability in the global financial system.

The Great Recession

As a measure of the severity of the Great Recession in the United States, the country's gross domestic product (GDP), representing its total economic output, had fallen by 4.3% by the middle of 2009.

US GDP Decline During the Great Recession

Based on the scenario provided, explain the mechanism by which the problems in one sector (housing) propagated to cause a decline in the entire economy.

Analyzing an Economic Downturn

Some economists argue that the period of economic decline following the 2007-2009 financial crisis was simply a severe, but typical, business cycle downturn. Evaluate this argument. In your answer, explain why this period is distinctly characterized as a 'Great Recession' resulting from widespread financial system instability.

Evaluating the Nature of the Great Recession

Arrange the following events in the correct chronological order to illustrate the progression that led to a major period of economic decline in the late 2000s.

Which statement best analyzes the causal relationship between the widespread instability in the global financial system from 2007-2009 and the period of economic decline that followed?

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