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Housing Collapse Paper
After reading Special Topic 5, write a 2-page paper answering the following:
Why did housing prices rise rapidly during 2002 – 2005?
Why did the mortgage default rate increase so sharply during 2006 and 2007 even before the 2008 – 2009 recession began?
What did the Community Reinvestment Act have to do with the housing bubble and collapse?
Cite your sources as needed. Use APA formatting.Microeconomics – Week #2 Assignment
PART 1-Changes to Supply, Quantity Supplied, Demand, and Quantity Demanded
Using the table, for each line item and its associated column, describe how the market for each specific product will be affected by the associated event indicating whether it will rise, fall, or no change. For example, in the first line item for the market of corn, based upon the event of a severe drought, the price will either rise or fall or no change, demand curve will shift left (fall) or right (rise) or no change, supply curve will shift left (fall) or shift right (rise) or no change, quantity demanded will rise, fall, or no change, and quantity supplied will either rise, fall, or no change.
| Event | Market for: | Price | Demand Curve | Supply Curve | Quantity Demanded | Quantity Supplied |
| A severe drought hits the Midwest corn growers | Corn | |||||
| The U.S. government reduces taxes on imported lumber | New Home Building | |||||
| The federal government raises the minimum wage from $7.25 per hour to $11.00 per hour | Minimum wage jobs | |||||
| Technology improves for automobile assembly | Autos |
PART 2 -Housing Collapse Paper
After reading Special Topic 5, write a 2-page paper answering the following:
Why did housing prices rise rapidly during 2002 – 2005?
Why did the mortgage default rate increase so sharply during 2006 and 2007 even before the 2008 – 2009 recession began?
What did the Community Reinvestment Act have to do with the housing bubble and collapse?
Cite your sources as needed. Use APA formatting.
