Question

Sub-prime mortgages implied:

a. Borrowers were not credit worthy
b. Lenders were not credit worthy
c. Mortgage rates were volatile
d. Housing prices were too high
e. All of the above

Answer 1

The sub-prime mortgage crisis during the 2008 recession is the subject of this question. It involved banks providing loans to borrowers with poor credit histories or little collateral, leading to economic consequences.

Step-by-step explanation:

The subject of this question falls under Social Studies as it pertains to the housing market and economic trends. Specifically, it relates to the sub-prime mortgage crisis that occurred in 2008 which had a significant impact on the larger economy.

Sub-prime mortgages were a type of loan that banks provided to borrowers with poor credit histories or little collateral. These loans had low payments initially, but the rates would increase after a couple of years. The belief was that housing prices would continue to rise, allowing the borrower to refinance before higher payments were due.

Ultimately, the sub-prime mortgage crisis was caused by a combination of factors including borrowers' inability to repay, risky behavior by investment firms, and lax oversight by the government.