One of the Major Contributing Factors to the 2008 Financial

question 32

Multiple Choice

One of the major contributing factors to the 2008 financial crisis in the U.S.was

• A)low housing prices.
• B)high interest rates.
• C)failure of effective regulation in the financial market.
• D)willingness to own a house.

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Definitions:

Externalities

Economic outcomes that impact third parties not directly involved, which can either be advantageous or disadvantageous.

Significant Costs

Expenses that are sufficiently large to impact an entity's financial decisions or financial statements.

Externalities

Economic impacts of a product or service on parties who do not directly participate in the transaction, which can be negative (pollution) or positive (vaccination benefits).

Referent Power

A form of influence based on the charisma and interpersonal appeal of the leader, rather than on formal authority.