Comp 1 Part 1 Economic Events Influence on Economic Activity Analysis.docx DE535 Econo

Comp 1 Part 1 Economic Events Influence on Economic Activity Analysis.docx    DE535  Economic Events Influence on Economic Activity Analysis  University of Phoenix  Digital Economics 535  Economic Events Influence on Economic Activity Analysis  Supply, demand, and economic equilibrium in the United States can be dramatically upset when certain economic activities occur.  In this paper I will analyze how two such specific events affected the United States economy.  First, dramatic employment drops with the combined  impact of the 2006 housing bubble burst and the following Great Recession.  Second, crippling interest rates imposed by the Federal Reserve, such as those during the 1975-1985 time period.  Employment, the Housing Bubble, and the Great Recession  In the early 2000s, American banks began offering home loans without thoroughly or accurately determining the potential borrowers ability to repay the loan. These ill-fated lending practices led to the 2005-2006 housing bubble and the resultant bubble burst. The U.S. Bureau of Labor Statistics reported an increase of 29.1 percent in residential construction employment  from 2001 to 2006 followed by a 36.6 percent decline from 2006 to 2009 ("U.S. Bureau of Labor Statistics", 2011). The rise and fall in construction employment were a direct result of the supply and demand for houses during the housing bubble.  œIn December of 2007, the national unemployment rate was 5.0 percent, and it had been  at or below that rate for the previous 30 months. At the end of the recession, in June 2009, it was  9.5