9781422281185

sisted for years. Then at 60 years of age Sutton had a heart attack and died. His family says that his money problems paid a role in his death. Young people just out of college also suffered. Laura Sankey took out big loans to get through law school. In 2009 she graduated and began looking for work. Despite her qualifications she could not find a job. She had to move in with her grandfather. Her student loans totaled $100,000 but she had no work to pay them off. After many months of trying, she gave up on looking for legal work. The stories of these people are not unique. They happened by the thousands all over North America and the world. Journalists began to call this economic downturn the Great Recession. Boom and Bust Economies like those in the US and Canada do not remain the same from year to year. They go through cycles. Boom times are when the economy grows. There are plenty of jobs. People who invest money in stocks and bonds earn good returns. Businesses make profits. Real

Words to Understand in This Chapter

depression— a recession that lasts for an extended time and exceeds a recession in severity. foreclosure— when borrowers cannot repay their loans, the lenders take back their property. interest— an amount of money charged in order to borrow money. recession— a bust cycle in the economy. speculation— the use of borrowed funds in order to make risky investments in the hopes of receiving a large profit.

8

The Economics of Global Trade