Great depression (1929) + Financial Crisis (2008)

Question 1

Causes of the Great Depression

Answer 1

-Speculative investment
-Bank failures
-Decline in consumer spending
-Mass Unemployment

Question 2

Impacts of the Great Depression

Answer 2

-More unemployment
-Deflationary spiral (reduced AD)
-Fall in GDP
-Recession

Question 3

Causes of the financial crisis

Answer 3

-Easy access to subprime mortgages
-Excessive risk-taking by banks (moral hazard)
-Poor regulation

Question 4

Impact of the financial crisis

Answer 4

-Global recession
-Bank failures (Lehman Brothers)
-Unemployment
-Stock market decline
-loss of trust in the banking system