ECONOMICS
MONETARY POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Banks having to write off bad debt
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Banks having their debt taken on by the government
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Renationalising all banks
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The enrire collapse of the financial markets
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Detailed explanation-1: -The crisis and the subsequent global financial crisis caused $7.4 trillion in stock market paper losses, and wiped out about $3.4 billion in real estate wealth. Many companies went bankrupt, and about 7.5 million Americans lost jobs, with the unemployment rate doubling to 10% in 2010.
Detailed explanation-2: -Housing prices started falling in 2007 as supply outpaced demand. That trapped homeowners who couldn’t afford the payments, but couldn’t sell their houses either. When the values of the derivatives crumbled, banks stopped lending to each other. That created the financial crisis that led to the Great Recession.
Detailed explanation-3: -Over the short term, the financial crisis of 2008 affected the banking sector by causing banks to lose money on mortgage defaults, interbank lending to freeze, and credit to consumers and businesses to dry up.