Which of the following contributed to the sharp economic downturn during 2008?
A) rising housing and stock prices
B) falling housing and stock prices
C) rising housing prices but falling stock prices
D) falling housing prices but rising stock prices

Question

Quizplus · Accepted Answer

The sharp economic downturn during 2008 was primarily caused by falling housing and stock prices. The housing market experienced a bubble, where housing prices rose rapidly before collapsing, causing many homeowners to owe more than their homes were worth. This led to a wave of foreclosures, which weakened the financial institutions that had invested heavily in mortgages. As a result, the stock market collapsed, causing many investors and businesses to suffer significant losses.

Which of the Following Contributed to the Sharp Economic Downturn