Which of the Following Was a Contributing Factor to the Rising

question 135

Multiple Choice

Which of the following was a contributing factor to the rising default and foreclosure rates beginning in the latter half of 2006?

• A) the increasing share of 30-year, fixed rate loans as a share of outstanding mortgages
• B) the rigid standards of rating agencies, such as Moody's and Standard and Poors, which limited the development of mortgage-backed securities
• C) the price-stability policies of the Federal Reserve during 1998-2008
• D) the erosion of lending standards during the preceding decade

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Definitions:

Columnar Joints

A geological feature where certain types of volcanic or igneous rock cool and shrink, forming vertical, polygonal columns of rock.

Internal Strain

Deformation within materials or geological structures due to applied stress.

Displacement

The difference in position of an object relative to its starting point, often used in physics to describe motion.

Rotation

The act of an object or celestial body turning around its own axis, leading to day and night cycles on planets like Earth.