Which of the Following Was an Underlying Cause of the Economic

question 102

Multiple Choice

Which of the following was an underlying cause of the economic crisis of 2008?

• A) A failure of government to impose regulations on Fannie Mae, Freddie Mac, and other mortgage lenders.
• B) The imposition of government regulations on Fannie Mae, Freddie Mac, and other lending institutions that eroded the conventional lending standards in place prior to the mid-1990s.
• C) Greedy mortgage lenders who extended risky loans to sub-prime borrowers even though the regulators were trying to limit these loans.
• D) Federal housing regulations that made it difficult for Fannie Mae, Freddie Mac, and other lending institutions to obtain sufficient loanable funds for the finance of housing construction.

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Definitions:

Base Year

A specific year against which economic or financial data is compared, often used to calculate indices or real growth rates.

Current Year

The ongoing year according to the Gregorian calendar, continuously updating as time progresses.

Paasche Price Index

A price index that measures the price changes between the current and base period by using the current period quantities as weights.

Doggerel

Doggerel denotes poorly written verse, often characterized by its triviality or nonsensical content.