Final answer:
The Great Recession was fueled by the widespread issuance of subprime mortgages, the collapse of complex mortgage-backed financial assets, and a subsequent banking crisis, leading to high unemployment and GDP decline. Aggressive policy interventions have been employed to aid recovery. The correct option is a.
Step-by-step explanation:
The economic crisis during the Great Recession was influenced by several critical factors. One significant contributor was banks issuing subprime mortgages to borrowers with low credit ratings, which led to a surge in mortgage defaults. Furthermore, the creation and failure of complex financial assets like collateralized mortgage obligations and credit default swaps exacerbated the crisis. These assets, rated safe by credit agencies, underpinned the housing bubble. When housing prices plummeted, and the recession deepened, the inability of many people to make mortgage payments led to a banking crisis, with many banks facing bankruptcy - 318 failed between 2008 and 2011 in the U.S. alone.
Consumer spending declined due to the lack of credit access, and international trade slowed significantly, impacting American businesses. The U.S. unemployment rates surged over 10%, and GDP fell. In response, the U.S. implemented aggressive fiscal and monetary policies to stabilize the financial markets and assist in economic recovery, which is ongoing.