One Reason the Housing Bubble Occurred Is Because

question 103

Multiple Choice

One reason the housing bubble occurred is because:

• A) the recency effect caused homes to typically be undervalued.
• B) the herd instinct caused everyone to believe home prices would continue to fall.
• C) securitization removed much of the risk from the sellers of subprime mortgages.
• D) All of these statements are true.

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Definitions:

Free Trade

The absence of tariffs, quotas, or other governmental restrictions on international trade, allowing goods and services to move freely across borders.

Developing Countries

Nations with a lower level of industrialization, lower income per capita, and usually lower standards of living, often working towards more advanced social and economic status.

Economic Openness

The extent to which a country allows for the free flow of goods, services, and capital across its borders.

United States Agency

Generic term for any of various organizations of the United States government, responsible for specific functions.