The Great Recession

Definition

The Great Recession was a severe global economic downturn that occurred from 2007 to 2009. It was sparked by a financial crisis due to risky lending practices in U.S housing market which led to widespread mortgage defaults.

Analogy

Imagine playing Jenga; each block represents different sectors of economy. When too many risky blocks (risky loans) were pulled out from bottom (housing market), it caused entire tower (economy) to collapse.

Related terms

Subprime Mortgage Crisis: This was part of what led up to The Great Recession - when lenders gave mortgages to borrowers who couldn't really afford them, like giving someone too many Jenga blocks they can't handle causing the tower to fall.

Financial Crisis of 2008: This is another name for The Great Recession, marking the year when the Jenga tower fell.

Stimulus Package: This is a set of economic measures put in place by a government to stimulate a struggling economy. It's like adding support beams to your shaky Jenga tower.