Locate two recent articles regarding the current global economic crisis. Write a one to two page paper. In your paper, answer the question: What causes an economic downturn? Support with the findings from the articles and other sources you would like to use. Solution The most recent and pathbreaking global economic crisis which can be mentioned is the \'Housing market bubble crash and the 2000 recession in the US\'. In US, the real estate market was experiencing a major boom during 2000. Banks were giving out loans without checking the credit history of the lender. Too many loans went out to the market, leading to too many people demanding and buying houses on lease or rent. It started working as a circle where loans were given out, houses were brought, real estate prices rose, leading to more demand for loans. When the time for payput came, the loan takers started defaulting on their loans. Panic arose among banks, when they found it difficult to get back their loans. Loans started getting defaulted and people started loosing out on their homes. Widespread panic arose and the news went global. As a result, investors started loosing faith in the US economy and started to take back their invesmtents. This led to major recession in US, because of a drop in demand and unempoyment. As it can be seen, the major reason for the economic downturn which occured in the US is both giving out too many loans along with panic resulting in bank runs. When too much money gets loaned out, chances of default start rising, resulting in panic and thus economic crisis..

1. Locate two recent articles regarding the current global economic crisis.
Write a one to two page paper.
In your paper, answer the question: What causes an economic downturn? Support with the
findings from the articles and other sources you would like to use.
Solution
The most recent and pathbreaking global economic crisis which can be mentioned is the
'Housing market bubble crash and the 2000 recession in the US'.
In US, the real estate market was experiencing a major boom during 2000. Banks were giving
out loans without checking the credit history of the lender. Too many loans went out to the
market, leading to too many people demanding and buying houses on lease or rent. It started
working as a circle where loans were given out, houses were brought, real estate prices rose,
leading to more demand for loans.
When the time for payput came, the loan takers started defaulting on their loans. Panic arose
among banks, when they found it difficult to get back their loans. Loans started getting defaulted
and people started loosing out on their homes. Widespread panic arose and the news went global.
As a result, investors started loosing faith in the US economy and started to take back their
invesmtents. This led to major recession in US, because of a drop in demand and unempoyment.
As it can be seen, the major reason for the economic downturn which occured in the US is both
giving out too many loans along with panic resulting in bank runs. When too much money gets
loaned out, chances of default start rising, resulting in panic and thus economic crisis.