Great Recession

Definition

The Great Recession was a severe economic downturn that occurred in the late 2000s, characterized by a significant decline in economic activity, high unemployment, and financial instability. This event had far-reaching implications, including its impact on the concept of drawing the poverty line.

5 Must Know Facts For Your Next Test

1. The Great Recession was triggered by the subprime mortgage crisis and the collapse of the U.S. housing bubble.
2. The recession led to a significant increase in the number of individuals and families living below the poverty line.
3. The economic downturn resulted in widespread job losses, particularly in the manufacturing and construction sectors.
4. Government interventions, such as the Troubled Asset Relief Program (TARP) and the American Recovery and Reinvestment Act, were implemented to stabilize the economy and provide assistance to those affected.
5. The Great Recession had a lasting impact on the way the poverty line is drawn and the criteria used to determine eligibility for social welfare programs.

Review Questions

• Explain how the Great Recession impacted the concept of drawing the poverty line.
  • The Great Recession led to a significant increase in the number of individuals and families living in poverty, as the economic downturn resulted in widespread job losses and financial instability. This event highlighted the need to re-evaluate the criteria used to determine the poverty line and the eligibility for social welfare programs. Policymakers had to consider the changing economic conditions and the impact of the recession on household incomes and basic living expenses when drawing the poverty line, in order to ensure that those most in need were able to access the necessary support and resources.
• Analyze the role of government interventions in addressing the impact of the Great Recession on poverty levels.
  • In response to the Great Recession, the government implemented various interventions, such as the Troubled Asset Relief Program (TARP) and the American Recovery and Reinvestment Act, to stabilize the economy and provide assistance to those affected. These measures were aimed at mitigating the impact of the recession on unemployment, household incomes, and the overall standard of living. By providing financial support, job creation programs, and social welfare initiatives, the government sought to alleviate the strain on individuals and families struggling to make ends meet, thereby influencing the way the poverty line was drawn and the criteria used to determine eligibility for assistance programs.
• Evaluate the long-term implications of the Great Recession on the concept of drawing the poverty line.
  • The Great Recession had a lasting impact on the way the poverty line is drawn and the criteria used to determine eligibility for social welfare programs. The economic downturn highlighted the need for a more dynamic and responsive approach to defining and measuring poverty, as the traditional measures may not have adequately captured the changing economic realities and the diverse experiences of individuals and families. Policymakers and researchers have since been exploring new methods and frameworks for drawing the poverty line, taking into account factors such as the cost of living, regional variations, and the impact of government interventions on household incomes and basic needs. The long-term implications of the Great Recession on the concept of drawing the poverty line may include a more comprehensive and inclusive approach to addressing poverty, with a greater emphasis on the role of economic and social policies in shaping the well-being of individuals and communities.

Related terms

Recession: A period of temporary economic decline, typically defined as two consecutive quarters of negative GDP growth.

Unemployment: A measure of the proportion of the labor force that is jobless and actively seeking employment.

Poverty Line: The minimum level of income deemed adequate to meet a person's basic needs, used to determine eligibility for government assistance programs.