6
Lesson 6
The Role of Housing in the Financial Crisis of 2007-2009

Students begin by examining data on the rise and fall of home prices and use supply and demand to analyze potential causes of the price changes. Then students learn about changes in the mortgage industry and identify the incentive effects of these changes. Students take part in a demonstration of the effects of securitization on investing in the housing market. Finally students calculate the costs and benefits of engaging in leveraging.

Concepts

  • Demand
  • Mortgage

Standards in Economics and Personal Finance

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