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Great Recession

Definition

The Great Recession was a severe worldwide economic crisis that took place from 2007-2009. It was sparked by a downturn in housing markets, risky lending practices, and complex financial products tied to U.S mortgages.

Related terms

Subprime Mortgage Crisis: These are the unstable cards in our analogy. It refers to the sharp increase and subsequent crash of housing prices, driven by an increase in risky lending to borrowers with poor credit.

Financial Crisis of 2008: This is when the card tower collapsed. It was a severe worldwide economic crisis that occurred in the financial world and was the most serious financial crisis since the Great Depression.

Stimulus Package: This is like trying to rebuild your card tower after it's fallen down. A stimulus package is a coordinated effort by the government to increase spending and investment to "stimulate" an economy out of a downturn.

"Great Recession" appears in:

Subjects (1)

  • AP US Government

Study guides (2)

  • AP US History - 9.1 Context: Present Day America

  • AP US History - 9.4 A Changing Economy

Practice Questions (2)

  • What was the cause of the Great Recession?

  • Which event illustrates a significant impact on economic policy as a result of the Great Recession?

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About Us

About Fiveable

Blog

Careers

Code of Conduct

Terms of Use

Privacy Policy

CCPA Privacy Policy

Resources

Cram Mode

AP Score Calculators

Study Guides

Practice Quizzes

Glossary

Cram Events

Merch Shop

Crisis Text Line

Help Center

© 2024 Fiveable Inc. All rights reserved.

AP® and SAT® are trademarks registered by the College Board, which is not affiliated with, and does not endorse this website.