How do you think the rise in subprime lending contributed to the credit crunch ?

Geography

1 answer:

Aneli [31]3 years ago

8 0

Answer:

Subprime lending is the practice of lending to borrowers who have poor credit-ratings. In other words, borrowers who are very likely to default on their debts.

Explanation:

With the expansion of subprime leding due to expansionary fiscal and monetary policies, banks got many risky assets that created a bubble. The bubble burst out and generated the Great Recession of 2007-2008.

Because so many clients could not pay their debts, banks saw their assets diminish while their liabilities rose quickly. This not only led to a credit crunch due to the poor financial health of the banks, but also the loss of viability for many banks. This is why the government had to step in, and in conjunction with the Federal Reserve, provide billions of dollars in relief for financial institutions.

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The Tropic of Cancer and the Tropic of Capricorn border what region?

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Answer:

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Explanation:

In order to learn more about the answer, let's consider describing what the Tropic of Cancer is and what the Tropic of Capricorn is.

Tropic of Cancer- This is also known as "Northern Tropic." It is said that at the time of its naming, the sun was positioned in the Cancer constellation (one of the constellations of the zodiac). It is located at 23.5 degrees north of the equator and runs through the regions mentioned above.

Tropic of Capricorn- This is also known as "Southern Tropic." It is said that at the time of its naming, the sun was positioned in the Capricorn constellation. It lies at 23.5 degrees south of the equator and runs through the regions mentioned above.

Additional Information

Equator- The imaginary line that divides the earth into the Northern and Southern Hemispheres.

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