One reason for the US housing bubble in the early 2000s was the low interest rate policy of the US Federal Reserve, which:
A) distorted interest rates and asset prices
B) diverted funding into wrong instruments
C) motivated a shift away from fixed rate loans in favour of adjustable rate loans
D) all the answers given

Question

Quizplus · Accepted Answer

The low interest rate policy of the US Federal Reserve contributed to the housing bubble by distorting interest rates and asset prices, diverting funding into risky financial instruments, and motivating a shift from fixed rate loans to adjustable rate loans, all of which are interconnected factors that fueled the bubble.

One Reason for the US Housing Bubble in the Early