Explain the part that government policy had in causing The Great Recession of 2009. (1 point)
A. The government decreased interest rates, causing everyone to rush to get mortgages. This massively increased the supply over the existing demand and caused housing prices to rise rapidly.
B. The government relaxed restrictions on mortgages. This allowed a large number of people to take out mortgages that they could not afford to pay back and greatly increased the number of defaults.
C. The government increased interest rates, causing people to not want new mortgages. This made new housing developments crash in price.
D. The government increased restrictions on mortgages, causing people to be unable to get mortgages. As a result, this made new housing developments crash in price.
1 answer
B. The government relaxed restrictions on mortgages. This allowed a large number of people to take out mortgages that they could not afford to pay back and greatly increased the number of defaults.