Ask Question
HistoryHistory
22 March, 16:46

What do economists mean by a "bubble"? why do many economists believe that there was a housing bubble in the united states between 2000 and 2005?

+5
Answers (1)
  1. 22 March, 20:01
    0
    A bubble is a situation in which there is a rapid escalation of asset prices which is later followed by a contraction of the same. When there is a surge in asset prices which is unwarranted by the fundamentals of the assets that are in question and an exuberant market behavior supports it, a bubble is created. When nobody buys anymore and starts selling everything off then the bubble is deflated.

    In that period, many people started buying homes with mortgages with adjustable rates. When the stocks started rising so did the prices of mortgage interest rates and people started realizing they couldn't pay back their loans and started losing homes. When the homes were taken away, there was a realization that the houses were not worth at all the price that was owed and that banks would suffer severe losses because of the bad mortgages that they gave. This led to the 2008 recession.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “What do economists mean by a "bubble"? why do many economists believe that there was a housing bubble in the united states between 2000 and ...” in 📙 History if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
In the late nineteenth century, corporate merger and the creation of holding trusts and companies led to which of the following A. Increasingly diversified markets B. The development of monopolies C. more small businesses D. Less international trade
Answers (2)
What was the goal of Reagan's "Peace Through Strength" policy? A. to launch an attack against the Soviet Union and provoke war B. to build military strength in order to challenge communist power C.
Answers (1)
What are some of the major causes of revolutionary movements throughout history?
Answers (1)
1) Which state had the most immigrants in 1996? A. Texas B. Florida C. New York D. California 2) from which two regions did most immigrants come in 1996? A. the Americas and Western Europe B. the Americas and Asia/Oceania C.
Answers (1)
What effect did the end of the British war with France have in the war of 1812? a. It freed number of British troops to fight in North American. b. It reduced the number of British troops available because many had been killed. c.
Answers (1)
New Questions in History
How was one similarity between the religious practices of the Persian empire and those of the Greek civilization?
Answers (2)
colorado has ___ electrons because colorado had __ representatives in the houses and _ senators in the senate for the state.
Answers (1)
Mudslides, landslides, and rock slides can cause material to move downhill due to the force of gravity. When it causes material to move to a new location, gravity is acting as a force of erosion. weathering. mountain building. temperature change.
Answers (1)
How genuine was the prosperity of the 1920s?
Answers (1)
Maximilian I was able to establish the Hapsburg Dynasty as a European power. True False
Answers (1)
Home » History » What do economists mean by a "bubble"? why do many economists believe that there was a housing bubble in the united states between 2000 and 2005?
Sign Up Forgot Password?