Between 2007 and 2009, the United States experienced a severe financial crisis and economic downturn commonly known as the Great Recession. Starting in 2006, housing values fell 30%, causing losses in mortgage-backed securities for families and financial institutions. The recession was marked by a drop in aggregate demand that caused a decline in GDP and an increase in unemployment.
In your initial post, draw or find an example of an aggregate demand and aggregate supply (AD/AS) model that illustrates the general trends of the U.S. economy during the Great Recession. (The example may be from your own research or from the textbook.) In addition to your image, provide a response to the following:
How did the AD/AS equilibrium change over time? Support your claims by referring to your AD/AS model. Select an economic factor (GDP, unemployment, price level) and explain what impact any shifts in AD or AS (or both) had on your chosen factor.
Note: Use the Insert Image button in the discussion menu to attach your image. Review the following resources for help taking a screenshot:
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In your response posts, comment on at least two posts from peers who chose different factors than you did. Explain how the economic factors are related. Share a news article that presents a different perspective on the economic outcomes of the Great Recession from your peers’ perspectives.
To complete this assignment, review the Module Five Discussion Guidelines and Rubric.