Which of the Following Led to the U

question 19

Multiple Choice

Which of the following led to the U.S. financial crisis of 2007-2009?

• A)financial innovation in mortgage markets
• B)agency problems in mortgage markets
• C)an increase in moral hazard at credit rating agencies
• D)all of the above
• E)only A and B of the above

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Definitions:

Government Caps

Limits set by the government on the amount of a commodity or service that can be produced, sold, or used.

Pollution Permits

Licenses issued by governments that allow the holder to emit a certain amount of pollutants over a given time period.

Property Rights

Legal rights to use, control, and derive benefits from a resource or property, including the right to exclude others.

Negatively Affects

Causes harm or reduces the quality, value, or performance of something.