What Was the Chain of Events That Occurred 2008-2009 When

question 50

Multiple Choice

What was the chain of events that occurred 2008-2009 when the U.S. "housing bubble collapsed"?

• A) Home prices rose out of the reach of households; home sales fell; and banks were left with no borrowers for their excess reserves, creating a crisis for banks.
• B) Savings increased, leading to less investment in homes; a lower demand for homes caused drops in home prices, which led to unemployment in the construction industry.
• C) Home values fell below mortgage values; homeowners defaulted on these loans, causing losses to financial firms, investors, and banks.
• D) Banks foreclosed on mortgage loans, which caused housing prices to drop, which led to interest rates rising so that homes became unaffordable.

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Definitions:

Self-Control

The power to oversee one’s affective responses, mental activities, and actions in the presence of enticements and spontaneous inclinations.

Material Self

A concept referring to aspects of an individual's identity formed through relationships with physical entities, such as possessions, appearance, and environment.

True Self

An individual's authentic core identity, unshaped by external influences or societal expectations.

Self-Efficacy

The belief in one's own ability to succeed in specific situations or accomplish a task, which can play a significant role in how one approaches goals, tasks, and challenges.