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What is a global economic meltdown?

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What is a global economic meltdown?

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In 2007 and 2008, the U.S. housing market collapsed amid a wave of defaults by homeowners. Fueled by globalizing trends that drew the world’s economies closer together, the crisis went worldwide, and a new phrase entered the vocabulary: global economic meltdown.IdentificationA global economic meltdown is a severe financial crisis that affects most of the world’s economies rather than confining itself to one country or region of the world.SignificanceBecause many banks and investment firms around the world invested in mortgage-backed securities, the collapse of the housing market bust in the U.S. became a global problem, as many banks lost money.EffectsAs a consequence of a global financial meltdown, consumers and businesses have been unable to obtain credit, as banks curtail lending. Fearing further economic decline, consumers reduce spending, and companies lay off workers.Prevention/SolutionGovernments responded to the global financial crisis by pumping money into the economy to stabi

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