1. Final Essay Preparation The “Great Recession” of 2008

2. Final AP Essay 1.Briefly discuss the major economic challenges facing the USA. 2.Analyze 2 important solutions to the structural problems facing the USA which will help it prosper in the 21 st century 80 points 40 minute college level essay Use at least 2 AP Econ Graph in your essay

3. Speculative Bubbles Holland 1634 - 1637 1996 - 2000 USA 2002 - 2007

4. Economy 2000 - 2012 Caused by Credit Bubble Led to 1996 - 2000

5. U.S. Economy in 2012 Major Economic Challenges 1)

6. The American Dream? http://www.npr.org/2012/05/29/153513153/american-dream-faces-harsh-new-reality

7. New Labor Trends Over the past 15 years Labor has significantly changed Globally: Globalization: “free trade” with other countries Collapse of Soviet Union & Communist Economies China & India emerge as economic powers (GDP growth > 10%) European Union forms common currency (now what?) Worldwide free flow of financial capital & labor (financial crisis) United States: Unions are declining in power Less “Job Security” Declining Manufacturing Jobs Rising Demand for Educated Workers ↑ Gap between Rich & Poor

8. Bottom 20% Top 5% Income Distribution +56.0%+ 1.0%Change: The pay gap widens in USA! D2D2 D2D2

9. Top 1%

10. Great Recession Slow Recovery

11. Slow Job Growth---Declining Labor Force Participation

12. GDP What creates real economic growth?

13. Keynes vs. Hayek http://www.youtube.com/watch?v=GTQnarzmTOc Animal Spirits versus Malinvestment

15. What Good Are Economists Anyway?

16. Economic Solutions?

17. Inside Job

19. FNMA & FHLMC Government takeover AIG Insurance Company Government Takeover Wall Street Firms Bankrupt or Bought Bear Stearns Merrill Lynch Lehman Brothers Current Problem Gov’t Takeover