The 2007 Recession Was Triggered Primarily by

question 37

Multiple Choice

The 2007 recession was triggered primarily by

• A) a steep drop in the stock market that caused the savings of many ordinary Americans to evaporate.
• B) bad loans made by the government and private banks to large but inefficient companies.
• C) an unwillingness of American consumers to borrow money.
• D) poor government regulation of a banking industry that made mortgage loans to people who couldn't repay them.
• E) problems with major European economies that lessened the ability of American companies to export goods to Europe.

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Definitions:

Independence

The state of being free from external control or influence, often related to auditor's neutrality.

Conceptual Framework

A set of fundamental principles and objectives that guides the development of accounting standards and practices.

General Purpose

Aimed to serve a wide range of uses or objectives rather than being specialized for a specific function or task.

Financial Reporting

The method of generating reports that reveal the financial condition of an organization to its management, investors, and governmental bodies.