Which of the Following Statements Is True About the High

question 68

Multiple Choice

Which of the following statements is true about the high rate of mortgage defaults that contributed to the financial crisis of 2007 and 2008?

• A)High interest rates on mortgage loans were the primary cause of defaults.
• B)The high rate of defaults occurred despite the efforts of government to discourage new home ownership and slow the growth of the housing bubble.
• C)Prior to the rise in defaults, banks had become lax in their lending practices, resulting in a large number of bad loans.
• D)The high rate of defaults resulted primarily from the two years of recession preceding the mortgage default crisis.

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Definitions:

Ambrosia

In mythology, the food or drink of the gods, often depicted as conferring immortality; in the modern context, it can refer to something extremely pleasing to taste or smell.

Red-money Income

Is not a standard economic term and may refer to disposable income after taxes, but without an established definition, it's speculative.

Trust

A firm belief in the reliability, truth, ability, or strength of someone or something, often considered fundamental in social, economic, and political relationships.

Government

The governing body of a nation, state, or community, charged with directing and administering public policy and affairs.