Stock market crash
Solutions for:
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Match the stock market to what happened with Real GDP
8 points
A
B
C
D
1
2
3
4
Clear selection
Bonus: match the time period to the description of events
8 points
Jan 1st 1929 – Jan 1st 1934
July 1st 1987 – Jan 1st 1988
Jan 1st 1996 – Jan 1st 1998
July 1st 2008 – July 1st 2010
A sudden crash that led to a sustained downturn
A sudden crash but continued real growth
A subdued market and a slowly rebounding economy
A strong market and steady real growth
Clear selection
2 points
Clear selection
So what was the point?
Many people think that the Great Depression was an inevitable consequence of the Wall Street Crash. However this exercise reveals that there is no fixed relationship between stock market performance and real economic activity. Policy choices have a big impact on outcomes, and effective responses can prevent recessions from occurring. 
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