Chapter 10 Response

Chapter 10 Response

by Evan Baker -
Number of replies: 2

According to Murphy and Sowell, the bubble in 2000 was caused mainly by low interest rates set by the government.  This made borrowing money too easy for the common person.  Also, banks gave out risky loans even to people who typically wouldn't qualify for any mortgages.  All these things caused home prices to rise really fast which led to the crash in 2000.

In reply to Evan Baker

Re: Chapter 10 Response

by Brady Ellington -
As we can see, the unseen effects of the government intervening in the economy have serious consequences. For example, one unseen effect was from 2001. When 9/11 happened, there should have been a recession. The government intervened and made spending go away for the war with the terrorists then and other things, and then when the recession happened in 2008 it was largely because of what happened in the early 2000s and government intervention.
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