The causes of the Financial Crisis of 2007-2009 include all of the following EXCEPT
A) deregulation of the financial industry.
B) high levels of U.S. and household debt that had been accumulating for decades.
C) the Federal Reserve kept interest rates extremely low.
D) predatory lending for "sub prime" loans.
E) housing prices rose much faster than household incomes in the 1990s and 2000s.

Question

Quizplus · Accepted Answer

The Federal Reserve keeping interest rates extremely low was not a cause of the financial crisis, but rather a response to the crisis in an attempt to stimulate the economy. The other factors listed - deregulation of the financial industry, high levels of debt, predatory lending, and housing prices rising faster than incomes - all contributed to the buildup of the crisis.

The Causes of the Financial Crisis of 2007-2009 Include All