The figure given below shows the demand [D and D'] and supply [S and S'] curves of shares of stock.Figure 17.2

-Which of the following factors led to the housing bubble in the U.S. in 2006?

Question

The figure given below shows the demand [D and D'] and supply [S and S'] curves of shares of stock.Figure 17.2
 
-Which of the following factors led to the housing bubble in the U.S. in 2006?

Quizplus · Accepted Answer

The increased amount of lending to subprime borrowers allowed for more people to buy houses, leading to a higher demand and driving up prices. This eventually led to the housing bubble as many of these borrowers were unable to make their mortgage payments, leading to defaults and foreclosures. The other choices (B, C, D, E) may have had some impact on the housing market but do not directly explain the housing bubble.

The Figure Given Below Shows the Demand [D and D']