Who Was Responsible for the Financial Crisis of 2007-2009

question 82

Multiple Choice

Who was responsible for the financial crisis of 2007-2009?

• A)The U.S.Federal Reserve, for its policy of easy money
• B)The U.S.government, for pushing banks to expand credit for low-income housing
• C)bankers, who aggressively promoted and resold subprime mortgages
• D)The U.S.Federal Reserve, the U.S.government, rating agencies, and bankers

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Definitions:

Market Value

The prevailing price for an asset or service that is available for transaction in an open marketplace.

Flotation Costs

The costs associated with issuing new stocks or bonds, including underwriting fees, legal fees, and registration fees.

Pre-Tax Cost

The cost of an investment or loan without taking taxes into account.

Debt-Equity Ratio

A metric reflecting how company assets are proportionally financed by shareholders' equity and debt.