The "perfect storm" of factors that contributed to the economic crisis of 2007 include
A) increases in the minimum wage rate, unchecked illegal immigration, and state government deficits.
B) financial deregulation, unchecked commodity prices, floating currency exchange rates.
C) poorly chosen mortgage loans, falling housing prices, and a contracting economy.
D) agency costs, inefficient markets, and perfect capital markets.

Question

Quizplus · Accepted Answer

The combination of poorly chosen mortgage loans, falling housing prices, and a contracting economy created a situation where homeowners found themselves unable to afford their mortgage payments, leading to defaults and foreclosures. This, in turn, led to a collapse of the housing market and a ripple effect throughout the financial system. The other options listed do not accurately reflect the factors that contributed to the economic crisis.

The "Perfect Storm" of Factors That Contributed to the Economic