Question

What are the similarities and differences between the Great Depression and the Great Recession periods in the United States?

I hope to get a detailed answer, thank you.

Answer 1

Answer:

The Great Depression was a severe world wide economic depression that tools place mostly during the 1930's orginating in the US. The timing of great depression varied across nations. it was started in US after a major fall in stock prices that began around sept 4, 1929, and became world wide new with a stock market crasj of oct 29 1929 that known as black Tuesday.

There are various causes of great depression was

a) over production in agriculture and industry

b) Unequal distribution of wealth

c) Unsustainable monetary policy

d) High tariffs and war debts

e) Stock market crash a financial panic.

Great Recession:

Great Recession was started in December 2007, from that time until it ends GDP declined by 4.3% and unemployment approached 10%.The great recession was world wide economic down word and devastated world financial market banking and real estate sector. Recession is a decline or stagnation in economic growth

Cause of great recession

• Subprime mortgages crises: It is home loan granted to borrowers with poor credit histories. their home loans are considered high - risk loan.
• Financial deregulation
• Loose monetory policy and low interest rates
• Globlisation.

Effect of great depression Vs. Great Recession

• American took money out of banks and banking system.
• salaries of prices were cut
• unemployment Rose 25% and higher
• Firm income dropped by 1/2
• Gross national product industrial output fell drastically.
• Entire economy collapsed and the Great depression set in and losted for adecade

Great Recession

• Banks all are facing a problem of having less credit for lending money since so many people cannot pay back the mostage loans and since other financial institutions have failed. other bank now will not lend to them.
• Unemplyment reached 10% in USA and monay countries went bank rupt of world trade fall by 40 % in 2008.

Crises has caused panic finaical market and encouraged investors to take their many out of risky mortgage bond and equaties also finincail instiiturions like lehman brother going bankrupt.

Great recession

• From tackling with great recession various steps were taken by US governments like baiouts of U.S finacial system helped economy to revived.
• Paying off government debts.
• Controling rating agencies to were also the main accused as all the derivaties such as CDS MBS etc