Economists who believe that policy errors are the source of economic instability argue that the crisis of 2008 was primarily the result of
A) housing regulations that undermined sound lending practices and Fed policies that generated the housing boom and bust.
B) the stock market crash.
C) the actions of speculators who drove up the world price of oil, the domestic price of gasoline, and other energy sources.
D) persistently high interest rates during the decade leading up to the crisis.

Question

Quizplus · Accepted Answer

Economists who believe policy errors are to blame for economic instability argue that the crisis of 2008 was primarily caused by housing regulations that allowed for unsound lending practices and Federal Reserve policies that created the housing boom and subsequent bust. This led to a collapse in the housing market, a surge in foreclosures, and the failure of many financial institutions that had invested heavily in housing-related assets.

Economists Who Believe That Policy Errors Are the Source of Economic