Explain why and how the 2008 crisis in the U.S affected the world economy and turned into a world economic crisis.
Q1 [50 points] Based on your reading of Blanchard’s Chapter 1, using the relevant graphs and data in the Chapter and Lecture notes, explain a) why the drop in housing prices caused a major financial crisis in 2008, and b) how the 2008 financial crisis transformed into a major economic crisis and crashed the economy. […]