Final answer:
True, the steep decline in the Dow Jones and Nasdaq index values from 2000 to 2009 contributed to the 2001 recession and higher unemployment.
Step-by-step explanation:
The statement that stock values in the Dow Jones were almost 20% lower in 2009 than in 2000, and stock values in the Nasdaq index were 50% lower in 2009 than in 2000 is true.
The significant drop in stock market values indeed contributed to the 2001 recession and the rise in unemployment that followed.
These events are part of a larger concern that the central bank's focus on inflation and unemployment might cause it to overlook other economic problems, such as asset bubbles and leverage cycles. Such cycles were observed during the 'dot-com' boom, when the Dow Jones and Nasdaq saw unsustainable increases in stock values.
The subsequent correction in these values contributed to economic downturns, affecting employment and overall economic stability.
During the dot-com boom from 1994 to 2000, the stock market experienced a significant increase in value. However, these rates of increase were not sustainable, and by 2009, stock values had dropped. The Dow Jones Industrial Index was almost 20% lower in 2009 compared to 2000, while the Nasdaq index was 50% lower.
This drop-off in stock market values contributed to the recession of 2001 and the subsequent increase in unemployment.