Which of the Following Factors Contributed to the Financial Crisis

question 33

Multiple Choice

Which of the following factors contributed to the financial crisis of 2007-2009?

• A)Greece's debt
• B)Subprime mortgages
• C)Drought conditions in the mid-west
• D)Both Greece's debt and subprime mortgages

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Definitions:

Fixed Costs

Expenses that do not change with the level of output or sales over a relevant period, such as rent, salaries, and loan payments.

Short Run

A period in which at least one input, such as plant size or capital equipment, in the production process is fixed.

Long Run

A period in economic theory during which all inputs can be adjusted by firms, allowing them to fully adapt to changes in market conditions or to scale their operations.

Sales

The transactions or activities involved in selling goods or services in return for money or other compensation.