In 2008, American taxpayers were effectively bailing out financial corporations that had lost _____ of dollars on subprime mortgages.

Question

Quizplus · Accepted Answer

The correct answer is billions. The financial crisis of 2008 was caused in part by the collapse of the housing market, which had been fueled by the creation and sale of mortgage-backed securities based on subprime mortgages. These securities had been marketed and sold to investors around the world, but when the housing market collapsed, many of the mortgages behind the securities were unable to be repaid. This led to massive losses for the financial corporations that had invested in these securities, including several large banks and investment firms. To prevent the collapse of the financial system, the US government stepped in with a bailout package worth hundreds of billions of dollars.

In 2008, American Taxpayers Were Effectively Bailing Out Financial Corporations