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EconomicsPeriod 10 Group 4

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Globalization

! Globalizationo moving beyond domestic borders and into international markets; increases international

trade

! Increasing interdependence between world economies

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Rise of China

! Internal Reformso protected domestic economyo gave benefits to the poor peasants and farmers in the 1950s

! Capitalismo

cooperated with Western industries and “borrowed” their strategieso widespread public investment

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China’s GDP (Gross Domestic Product)

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North American Free Trade Agreement

! United States, Mexico, Canada

! To eliminate tariffs and other barriers of trade and investment

!

Came into effect on January 1st, 1994

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Great Recession of 2008

! Lasted from December 2007 to June 2009

! Caused by the burst of the housing bubble

!

Banks were lending a lot of money but there was no real money to back it up

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Effects of the Great Recession

! Loss of consumption + Crash of financial markets/ stocks + Collapse of business investments" Loss of jobs + Low family income + increased poverty

!  Assets of property owners plummeted

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Recovery

! Economic Stimulus Act of 2008 (January 2008)o sent a tax rebate and increased limits on expensing investment

costs

! Troubled Asset Relief Program (TARP) in October 2008o  Allowed US Treasury to put money in nation’s bankso 150 billion $$

!  American Recovery and Reinvestment Act (ARRA)

passed in early 2009

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Legacy Of Great Recession

Main Causes of the Great Recession1. Credit crunch and fall in bank lending

2. Fall in confidence resulting in financial instability3. Fall in exports from global recession4. Collapse in house marketing " Negative wealth effects5. Fiscal austerity compounding the initial fall of GDP6. Europe: single currency created more problems

because of over-valued exchange rates and high bondyields

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Legacy Of Great Recession

- economy has been growing since June 2009- increase in jobs- corporate profits have increased sharply- forclosures falling-

household wealth expanding

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Ronald Reagan

! Reaganomicso Reduce growth of government spendingo Reduce federal income tax and capital gains tax

o Deregulation of domestic marketso Increase military spending

! Supply-side economicso providing to supply more goods

! Trickle-down theoryo stimulates economy by lowering taxes and promoting consumption

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George D.W Bush

! Sweeping financial deregulation helped build the housing bubble and allowedfinancial institutions to go after risky trades unchecked.! Eliminated the rules that allowed Wall Street to cause the financial crash that

plunged the nation into the Great Recession.

! Tax cuts

! Wars in Iraq and Afghanistan

! Hope For Homeowners! Bush’s proposal to assist those struggling with their mortgages, was a colossal

failure

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Barack Obama

! Recovery Act of 2009 (Obama Stimulus Package)o Decrease unemploymento Maintain transparency in government spendingo Stabilize and stimulate domestic economy

!  Affordable Care Act (Obamacare)o decrease spending on healthcareo give affordable health insurance to everyoneo expanded health care eligibility

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Bibliography

- http://www.britannica.com/EBchecked/topic/1661642/The-Great-Recession-of-2008-09-Year-In-Review-2009/286636/The-US-Response (6/3/15)

- http://thinkprogress.org/economy/2012/06/14/499523/5-reasons-americans-are-right-to-blame-bush-for-the-bad-economy/ (6/3/15)

- http://www.un.org/en/development/desa/policy/cdp/cdp_background_papers/bp2000_1.pdf  (06/09/15)- https://www.foreignaffairs.com/articles/asia/2008-01-01/rise-china-and-future-west (06/9/15)

-https://images.angelpub.com/2013/39/21530/china-gdp-by-2025.png (06/09/15)

- http://www.globalresearch.ca/china-rise-fall-and-re-emergence-as-a-global-power/29644 (06/10/15)- http://www.naftanow.org/faq_en.asp#faq-1 (06/10/15)- http://www.recovery.gov/arra/About/Pages/The_Act.aspx (06/10/15)- https://www.upcounsel.com/what-is-obamacare (06/10/15)- http://www.commondreams.org/sites/default/files/imce-images/trade-globalization1.jpg (06/10/15)- http://www.federalreservehistory.org/Period/Essay/15 (06/10/15)