Which of These Was NOT a Factor Leading to the 2007-2009

question 75

Multiple Choice

Which of these was NOT a factor leading to the 2007-2009 financial crisis?

• A) low interest rates encouraging a housing boom
• B) underestimation of the level of risk inherent in the mortgage market
• C) lack of faith in the ability of the U.S. Treasury to pay on government bonds
• D) investors buying trillions of dollars of assets that depended on rising housing values

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Definitions:

Social Regulation

Rules and policies designed to correct market failures that affect people's health, safety, welfare, and social wellbeing.

Administrative Costs

Administrative Costs are expenses related to the general operation of a business, including expenses such as office supplies, salaries of non-production employees, and legal and accounting services.

Compliance Costs

Expenses that businesses incur to adhere to industry regulations, standards, and laws, including the costs of implementing necessary procedures and reporting.

Horizontal Price-fixing

An illegal agreement between competitors to fix, raise, or lower prices of goods or services at a certain level, stifling competition.