Question

In which industry did a sudden decrease in value lead to the economic crisis of 2008-2009 in America? Stock market Technology Housing None listed

Answer 1

The industry that showed a sudden decrease in value that lead to the economic crisis of 2008-2009 in America was the housing industry since it went from a boom in the mid-2000s to a bust in late-2000s.

This crisis in the real-estate industry resulted in what was called “The Great Recession”. The Great Depression started in America and then became a worldwide crisis that finished in 2009. This economic downturn had a significant impact in global economies and it is compared to “The Great Depression” of 1929.

Answer 2

The correct answer is Housing.

The financial crisis of 2008 is considered by several economists the worst economic disaster since the Great Depression of 1929.

It began in 2006 when housing prices started to fall. At the time realtors saw as a positive sign such as an overheated market reaching a more sustainable level.

What realtors did not realize back then is that there were too many homeowners with questionable credit, for example, loans for 100% or more of the value of the house, which led banks to invest in subprime areas (mortgage-backed securities including bundled loan portfolios, derivatives and credit default swaps).

This type of investment mentioned above collapsed the investment bank Lehman Brothers on September 15th, 2008 developing an international banking crisis.