Which of the Following Is the Main Reason Behind the Financial

question 29

Multiple Choice

Which of the following is the main reason behind the financial crisis of 2008?

• A)There was a sharp decline in the growth rate of money supply.
• B)There was a sharp increase in the quantity of exports from the U.S.to Asian countries.
• C)Banks in the U.S.made subprime mortgage loans.
• D)Banks had much higher requirements for borrowers to qualify for loans than normal.

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Definitions:

Annual Earnings Ratio

The comparison of earnings over a year often used to analyze profitability or compare salaries.

Average Variable Cost

The total variable cost divided by the number of units produced, showing the variable cost per unit of output.

Average Total Cost

The expense for each unit produced, derived by dividing the total production expenses by the quantity of output.

Total Fixed Cost

The sum of the costs that do not vary with output. They will be incurred as long as a firm continues in business and the assets have alternative uses.