The international financial crisis of 2007 was the result of
A) failure of the Euro currency.
B) runaway inflation in the U.S.
C) a deep global recession.
D) the collapse of global currency markets.
E) defaults on U.S. mortgage-backed securities.

Question

Quizplus · Accepted Answer

The international financial crisis of 2007 was primarily caused by defaults on U.S. mortgage-backed securities, which triggered a chain reaction of financial losses and credit tightening throughout the global financial system. The crisis eventually led to a deep global recession, but the initial trigger was the collapse of the housing market and the subprime mortgage industry in the U.S. The other answer choices (failure of the Euro currency, runaway inflation in the U.S., collapse of global currency markets) were not significant factors in the crisis.

The International Financial Crisis of 2007 Was the Result of