List the various reasons that contributed to the financial crisis that occurred in 2008
Low interest rates from 2002 to 2004 caused excessive borrowing. Deregulation in the mortgage industry and lower standards by Fannie Mae and Freddy Mac led to the significant amount of sub-prime mortgages to borrowers who could not afford to make payments when interest rates increased in 2006 . With limited down payments and decreasing home values, some owners walked away from their homes leading to more foreclosures and a further decline in the housing market. These mortgages were then bundled and sold to investors; this leveraging concentrated the risk which was not rated correctly by agencies like Moody's and S&P.
You might also like to view...
When economists assume that people are rational, they assume that
a. consumers maximize profits. b. firms maximize revenues. c. consumers maximize utility. d. firms maximize output.
If the poverty line in 2017 for a family of four was $24,600, which of the following is correct?
A. The cost of a minimal diet for a family of four was $4,100. B. The cost of a minimal diet for a family of four was $6.150. C. Unemployment benefits covered the first $24,600 of lost income. D. Social security payments for the year totaled a minimum of $24,600 for a family of four.