Question

Which of the following could be considered a cause of the 2007–2008 economic crash? A. Too many people out of work B. Too many people working high-paying jobs C. Too many people going to college D. Too many risky loans given out

Answer 1

D. would be the answer to this question

Answer 2

The correct answer is:

D. Too many risky loans given out.

Explanation:

The economic crisis of 2008, which was one of the worst economic crisis in the world, began when too many risky loans were given out to people who couldn't afford to pay back so eventually the debts became bigger than the money available, leading the bank system to almost collapse.

Risky loans were given to people mainly when they wanted to buy a house, because mortgage brokers sold the risky mortgages with the good mortageges to investors and banks, and because the house market was rising everybody was making money, but the bubble broke out because families were not able to pay their mortgages because of the interest rates and as more credit was given the house prices started to fall, so there was a huge debt and no one to pay for it.