Which of the following is among the possible reasons that the 2007-2009 financial crisis did not result in an economic depression?
A)new lending programs by the central bank
B)privatization of Fannie Mae and Freddie Mac
C)a substantial increase in exports to China
D)rapid foreclosure of "underwater" properties

Question

Quizplus · Accepted Answer

The new lending programs implemented by the central bank helped to inject liquidity into the banking system, preventing a complete collapse of the financial system and allowing businesses to continue accessing credit.

Answer: B
 The privatization of Fannie Mae and Freddie Mac, which had been two of the largest holders of subprime mortgages, helped to reduce the government's exposure to risky assets and stabilized the housing market.

Answer: C
 Although exports to China did increase during this time, this factor alone was not significant enough to prevent an economic depression.

Answer: D
 The rapid foreclosure of "underwater" properties actually contributed to the severity of the crisis by causing a sharp decline in housing prices and further exacerbating the problem of mortgage defaults.

Which of the Following Is Among the Possible Reasons That