The worldwide recession of the late 2000s
A) happened despite strict government regulation.
B) was caused by excessively high interest rates.
C) can be characterized as a moral hazard problem.
D) caused the collapse of the U.S. housing market.
E) began with the collapse of the Asian currencies.

Question

Quizplus · Accepted Answer

The worldwide recession of the late 2000s, often referred to as the Global Financial Crisis, can be characterized as a moral hazard problem because financial institutions took excessive risks, believing they would be bailed out by governments if things went wrong.

The Worldwide Recession of the Late 2000s