(A) ** Subprime mortgages were granted to people whose incomes were too low for the houses they were buying
(B) Banks were uninsured and personal savings were therefore wiped out
(C) ** Household debt was too high
(D) ** Overproduction of houses
(E) Overspeculation on the stock market
EXPLANATIONS BELOW
Concept note-1: -The Great Recession lasted from roughly 2007 to 2009 in the U.S., although the contagion spread around the world, affecting some economies longer. The root cause was excessive mortgage lending to borrowers who normally would not qualify for a home loan, which greatly increased risk to the lender.
Concept note-2: -Key Takeaways. The stock market and housing market crashes of 2008 trace their origins to the unprecedented growth of the subprime mortgage market that began in 1999. Fannie Mae and Freddie Mac made home loans accessible to borrowers who had low credit scores and a higher risk of defaulting on loans.