QQuestionEconomics
QuestionEconomics
"Which three factors led to the Great Recession in 2008?
The fall of the stock market
Banks giving subprime mortgages
A decrease in international lending
The deregulation of the financial sector
High-interest rates"
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Answer
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Step 1: Identify the causes of the Great Recession
The Great Recession in 2008 was the most severe economic crisis since the Great Depression. Economists and historians have identified several key factors that contributed to this crisis.
Step 2: Analyze the role of banks giving subprime mortgages
One of the primary causes of the Great Recession was the proliferation of subprime mortgages. Banks began giving these high-risk loans to homebuyers with poor credit histories, often with adjustable interest rates that would increase significantly over time. When the housing market slowed down and many homeowners were unable to make their payments, it led to a wave of foreclosures and a sharp decline in housing prices. This, in turn, had a ripple effect on the broader economy, causing losses for investors and financial institutions around the world.
Final Answer
The three factors that led to the Great Recession in 2008 were: 1. Banks giving subprime mortgages 2. The deregulation of the financial sector 3. The fall of the stock market
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