Which of the following was an underlying cause of the economic crisis of 2008?
A) A failure of government to impose regulations on Fannie Mae, Freddie Mac, and other mortgage lenders.
B) The imposition of government regulations on Fannie Mae, Freddie Mac, and other lending institutions that eroded the conventional lending standards in place prior to the mid-1990s.
C) Greedy mortgage lenders who extended risky loans to sub-prime borrowers even though the regulators were trying to limit these loans.
D) Federal housing regulations that made it difficult for Fannie Mae, Freddie Mac, and other lending institutions to obtain sufficient loanable funds for the finance of housing construction.

Question

Quizplus · Accepted Answer

The economic crisis of 2008 was partly caused by government regulations that encouraged lending to sub-prime borrowers, eroding traditional lending standards and contributing to the housing bubble.

Which of the Following Was an Underlying Cause of the Economic