Business Basics
This phase happens when the economy slows down and businesses make less money
What is the recession?
This specific economic anomaly peaked on March 10, 2000, before its catastrophic burst dragged down the tech-heavy Nasdaq index.
What is the dot-com bubble?
This measures the total value of goods and services produced in the country
What if GDP?
The Federal Reserve lowered these to help the economy grow again
What arte interest rates?
Although the 2001 recession officially lasted only eight months, the subsequent recovery was widely criticized for lacking job growth, earning it this two-word nickname.
What is a jobless recovery?
In the late 1990s, these high-risk investors poured billions into unproven tech companies, only to pull back sharply when the market turned.
What are venture capitalists?
Many technology companies lost money after this bubble burst
What is the dot-com bubble?
During the 2001 recession, this economic indicator increased because many people lost jobs
What is unemployment?
To stimulate borrowing, the Federal Reserve aggressively cut this specific interest rate 11 times in 2001, dropping it to a historic low of 1.75%.
What is the federal funds rate?
Even after the recession ended, many people still struggled to find these
What are jobs?
Many failed tech firms of 2001 burned through their cash despite launching these, a company's very first sale of stock to the general public.
What is an Initial Public Offering (IPO)?
These attacks in the September 2001 hurt consumer confidence and the economy
What are the 9/11 terrorist attacks?
A recession is traditionally, though unofficially, defined as two consecutive quarters of decline in this comprehensive measure of national economic output.
What is Gross Domestic Product (GDP)?
Tax cuts are an example of this type of policy
What is fiscal policy?
Following the high-profile bankruptcies of tech giants like WorldCom, Congress passed this 2002 act to drastically reform corporate accounting and auditing rules.
What is the Sarbanes-Oxley Act?
The 2001 recession was heavily driven by the overvaluation of startups using this generic two-word suffix in their internet addresses.
What is dot-com?
Beyond the tech crash, the 2001 downturn was severely worsened by the economic shockwaves of these historic autumn events.
What are the September 11 terrorist attacks?
During the 2001 recession, this major tech index lost roughly 78% of its value from its peak, signaling a massive destruction of paper wealth.
What is the Nasdaq Composite?
Signed into law by President George W. Bush in June 2001, EGTRRA was a massive package centered on this type of fiscal relief to spur consumer spending.
What is a tax cut?
While the broader economy recovered relatively quickly, it famously took over a decade for this specific stock market index to finally return to its March 2000 peak.
What is the Nasdaq?
This organization decides when recessions officially begin and end in the U.S.
What is the National Bureau of Economic Research, or NBER?
Prior to the crash, this independent government agency aggressively raised interest rates to cool off an overheating economy, inadvertently tightening capital.
What is the Federal Reserve?
Often lagging behind other metrics, this indicator rose as companies like Amazon and Cisco shed large portions of their workforce to survive the crash.
What is the unemployment rate?
Following the 9/11 attacks, Congress quickly approved billions of dollars in emergency funding for this specific sector to prevent a total collapse of commercial travel.
What is the airline industry?
The low interest rates used to fix the 2001 recession inadvertently diverted speculative capital out of stocks and into this sector, setting the stage for the 2008 financial crisis.
What is the housing market (or real estate sector)?