Question

How did the subprime mortgage problem affect the U.S. economy?

1) Housing prices decreased.
2) Home equity increased.
3) Stock market crash stimulated interest in real estate investment.
4) It created jobs in the construction industry.

Answer 1

The subprime mortgage problem had a significant impact on the U.S. economy, including a decrease in housing prices and a stock market crash. It also led to a banking crisis and job losses.

Step-by-step explanation:

The subprime mortgage problem had a significant impact on the U.S. economy. It led to a decrease in housing prices, which contributed to a decrease in the overall wealth of the household sector. Additionally, the problem spread throughout the financial markets, resulting in a stock market crash and a banking crisis. As a result, the economy experienced job losses and a decline in consumer spending.