Which of the Following Statements Reflect the Primary Change in the Mortgage

question 79

Multiple Choice

Which of the following statements reflect the primary change in the mortgage market that played the major role in creating the housing crises in 2007 through 2009?

• A)Low interest in the mid 2000's.
• B)Adjustable rate mortgages to low income citizens with low credit scores.
• C)The large increase in interest rates in 2007.
• D)The reduction in newly constructed housing.

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Definitions:

Government Intervention

Actions taken by a government to influence or directly regulate economic, social, or other activities within a country.

Socioeconomic

Pertaining to the relationship between social and economic elements.

Neo-classical

Pertaining to a 19th and early 20th-century revival of interest in classical economic theories, focusing on marginal utility, distribution of resources, and the roles of supply and demand.

Classical Economic

refers to a school of thought in economics that emphasizes the importance of free markets, competition, and the self-regulating nature of economic systems, originating mainly from the ideas of Adam Smith.