Which is a reasonable cause for the formation of the housing bubble in the 2000s?
A) high market confidence
B) credible monetary policy
C) low Federal Funds rate
D) the Fed's use of a monetary policy rule

Question

Quizplus · Accepted Answer

The low Federal Funds rate set by the Federal Reserve was a key factor in creating the housing bubble in the 2000s. The low interest rates led to a surge in lending and borrowing, which caused a rise in housing demand and prices. This created a housing bubble that eventually burst, leading to the financial crisis of 2008.

Which Is a Reasonable Cause for the Formation of the Housing