Which of the Following Contributed to the Financial Crisis of 2008

question 25

Multiple Choice

Which of the following contributed to the financial crisis of 2008?

• A)the housing price boom (2002-2005), followed by a housing price bust (2007-2008)
• B)a sharp reduction in stock prices in 2008
• C)a sharp increase in the price of crude oil from January 2007 to mid-year 2008
• D)all of the above

---

Definitions:

Self-Interest

The motivation of individuals that drives them to act in pursuit of their own desires and benefits, often considered a fundamental economic assumption.

Vickrey Auction

A type of sealed-bid auction where bidders submit their bids without knowing the others' bids, and the highest bidder wins but pays the price bid by the second-highest bidder.

English Auction

A common auction format where the price ascends and participants bid openly against one another, with the item being sold to the highest bidder.

Rational Bidders

Participants in an auction or bidding process who make decisions based on logic and self-interest, aiming to maximize their utility or benefit.