Applied Economics & Statistics B: Topic 2 - Financial Crisis

Question 1

What are the names for the Financial Crisis?

Answer 1

2007–08 financial crisis, also known as the
Global Financial Crisis and US subprime
mortgage crisis

Question 2

Why is the 2007-08 financial crisis significant?

Answer 2

The 2007-08 financial crisis is the first global
and systemic crisis of the modern times,
only comparable to the Great Depression in
the 1930s

Question 3

State the 2 main effects of the 2007-08 financial crisis

Answer 3

• Drop in GDP, GDP growth, consumption
  and investment.
• Increase in unemployment

Question 4

Describe different states’ performance from the financial crisis using real GDP

Include EA, US, UK, JP, CH, SE, NO, CA

Answer 4

• All states had a real GDP of 100 at the start of 2007
• All of them gradually rise to around 102 up until 2008
• Then, when the financial crisis begins, they all fall rapidly
• Notably and anonymously, CH continued to rise and finally spiked in GDP mid-2008 to ~105.5 before falling along with every other state
• EA fell the hardest down to 91 at the start of 2009…