THE RISE OF POLITICAL CONSERVATISM 1980 1992
PRESIDENT GEORGE HW BUSH
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
The Federal Reserve raised the interest rate from 1% to 2% and people were so mad they refused to make their loan payments.
|
|
|
The Federal Reserve lowered the interest rate and too many people got loans.
|
|
|
The Federal Reserve raised the interest rate from 1% to 6% and some people’s house payments more than doubled.
|
|
|
None of the above
|
Detailed explanation-1: -The 2008 financial crisis began with cheap credit and lax lending standards that fueled a housing bubble. When the bubble burst, the banks were left holding trillions of dollars of worthless investments in subprime mortgages. The Great Recession that followed cost many their jobs, their savings, and their homes.
Detailed explanation-2: -However, the main culprit was mortgage-backed securities, collaterized debt obligations, and rising adjustable mortgage interest rates on both prime and subprime loans.
Detailed explanation-3: -Securitization of mortgage debt in bond-like investments such as mortgage-backed securities and collateralized debt obligations was a big cause of the financial crisis. Securitization of home mortgages fueled excessive risk-taking throughout the financial sector, from mortgage originators to Wall Street banks.
Detailed explanation-4: -At the time, lenders probably saw subprime mortgages as less of a risk than they really were-rates were low, the economy was healthy, and people were making their payments.