The bursting of the housing bubble was a key factor in causing the severity of the
A) Great Depression.
B) inflation of the late 1970s.
C) recession of 2001.
D) financial crisis of 2007-2009.

Question

Quizplus · Accepted Answer

The housing bubble, caused by risky mortgage lending practices and speculation in the housing market, led to a sharp decline in housing prices and triggered a wave of mortgage defaults and foreclosures, which in turn led to widespread losses among financial institutions and a tightening of credit markets. This ultimately contributed to the global financial crisis of 2007-2009, which was one of the worst economic crises since the Great Depression.

The Bursting of the Housing Bubble Was a Key Factor