The Great Recession is a time of economic decline observed in world markets during the early 2000s. It is a period of declining aggregate output in the economy. The majority of consumers not only in America, but also in most Western nations and many other areas of the world have been impacted by the Recession, 86% of the US and almost 55% of Europe. Business cycles affect all of us in immediate and important ways. For example, when output is rising it is easier to find a good job, but when output is falling, finding a good job might be difficult. It has been said to be one of the worse global recessions to occur since World War II. The US recession began in December of 2007 when unemployment rose to over 10% before it slowly began to recover
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As consumption spending and business investment dried up, massive job loss followed. The US labor market lost 8.4 million jobs, about 6.1% of payroll employment. Some 46.2 million Americans lived below the official poverty level in 2010, which is about 15.1 percent of the population. The number of people living in poverty grew by 27 percent between 2006 and 2010. Poverty increased greatly among the Hispanics and African Americans, households of women, and working class adults between the ages of 18-34. If not for the stimulus package of 2009, the impact of the Great Recession would have been a lot worse. Federal deficits created a program placing a debt ceiling that triggered a spending cut in order to control spending which in turn affected the poor. This was by far the most dramatic employment contraction since the Great Depression. Even after the economy stopped shrinking in 2009, its growth was not strong enough to create the jobs needed to keep up with the population growth, or the backlog of workers who lost their jobs during the …show more content…
The economy is still suffering from a deficiency of demand. A recession occurs when consumers and firms stop buying. In response to this, producers begin producing fewer products and laying off more workers, which in turn, the unemployment results in more reduction of demand. A recovery occurs when consumers and firms start spending more, and though we can see there has been an increase in consumer and firm spending in recent years, its level is below where it was when the recession started. During past recessions, it’s taken about 10 months to 3 years for the economy to regain the jobs it lost during the recession. However, unfortunately, the recession from the Great Recession is following the sluggish pattern of previous recoveries, but with a much longer timeline. In 2010, 16 months after the end of the recession, the economy still had 5.4% fewer jobs than it did before the recession started. While the Federal government is increasing demand, state and local governments are reducing. The recession has had a huge impact on state and local revenues, and governments are being forced to cut back on essential services. Todays unemployment rate is a consequence of the shortfall of demand. It’s not high because of changes or workers not trying to find a job, its high because we are not producing anywhere near a normal level. The Great Recession has brought
As consumption spending and business investment dried up, massive job loss followed. The US labor market lost 8.4 million jobs, about 6.1% of payroll employment. Some 46.2 million Americans lived below the official poverty level in 2010, which is about 15.1 percent of the population. The number of people living in poverty grew by 27 percent between 2006 and 2010. Poverty increased greatly among the Hispanics and African Americans, households of women, and working class adults between the ages of 18-34. If not for the stimulus package of 2009, the impact of the Great Recession would have been a lot worse. Federal deficits created a program placing a debt ceiling that triggered a spending cut in order to control spending which in turn affected the poor. This was by far the most dramatic employment contraction since the Great Depression. Even after the economy stopped shrinking in 2009, its growth was not strong enough to create the jobs needed to keep up with the population growth, or the backlog of workers who lost their jobs during the …show more content…
The economy is still suffering from a deficiency of demand. A recession occurs when consumers and firms stop buying. In response to this, producers begin producing fewer products and laying off more workers, which in turn, the unemployment results in more reduction of demand. A recovery occurs when consumers and firms start spending more, and though we can see there has been an increase in consumer and firm spending in recent years, its level is below where it was when the recession started. During past recessions, it’s taken about 10 months to 3 years for the economy to regain the jobs it lost during the recession. However, unfortunately, the recession from the Great Recession is following the sluggish pattern of previous recoveries, but with a much longer timeline. In 2010, 16 months after the end of the recession, the economy still had 5.4% fewer jobs than it did before the recession started. While the Federal government is increasing demand, state and local governments are reducing. The recession has had a huge impact on state and local revenues, and governments are being forced to cut back on essential services. Todays unemployment rate is a consequence of the shortfall of demand. It’s not high because of changes or workers not trying to find a job, its high because we are not producing anywhere near a normal level. The Great Recession has brought