select all the correct answers. which three factors led to the great recession of 2008? the financial sector…

select all the correct answers. which three factors led to the great recession of 2008? the financial sector was regulated. banks loaned money to risky borrowers. banks decreased interest rates. the price of houses dropped. the stock market crashed.

select all the correct answers. which three factors led to the great recession of 2008? the financial sector was regulated. banks loaned money to risky borrowers. banks decreased interest rates. the price of houses dropped. the stock market crashed.

Answer

Brief Explanations:

Banks loaning to risky borrowers led to a high - risk loan portfolio. When the housing market crashed (house prices dropped), borrowers defaulted on mortgages. The stock market crash also contributed to the overall economic downturn. Regulation of the financial sector would not typically cause a recession; rather, lack of proper regulation was a factor in 2008. Decreasing interest rates was a response to the recession, not a cause.

Answer:

B. Banks loaned money to risky borrowers. D. The price of houses dropped. E. The stock market crashed.