What was the impact of "subprime" mortgages on the economy?
A) They reduced interest rates.
B) They increased defaults and caused large losses at financial institutions.
C) They had a positive impact on economic growth.
D) They initially reduced profits and sales of lenders.

Question

Quizplus · Accepted Answer

Subprime loans were given to people who did not have enough income to qualify for ordinary mortgages. When housing prices started to turn down, suddenly many Americans found they owed more money than their homes were worth and people began defaulting on their loans.

What Was the Impact of "Subprime" Mortgages on the Economy