Which of the following is most central to the understanding of the economic crisis of 2008?
A) the decline of the stock market in late 2007
B) the housing boom (2001-2005) and bust (2007-2008)
C) the sharp rise in oil prices in 2008
D) unethical investment practices beginning in 2000

Question

Quizplus · Accepted Answer

The housing boom and subsequent bust was the primary cause of the economic crisis of 2008. The widespread availability of subprime mortgages and the securitization of these mortgages into complex financial instruments led to an unsustainable housing bubble. When the housing market ultimately collapsed, many homeowners were left with unaffordable loans and many financial institutions faced significant losses. This ultimately led to a larger financial crisis that affected the global economy.

Which of the Following Is Most Central to the Understanding