Question

Which event triggered the recent recession that began in 2008?

A) Consumers were unwilling to purchase electronic equipment.
B) Businesses were unable to make loan payments.
C) Homeowners were unable to make mortgage payments.
D) Renters were unable to find available housing.

Answer 1

The recent recession that began in 2008 was triggered by the burst of the housing bubble. Signs of the bursting began in 2005 as delinquency and late payments increased and an oversupply of new homes on the market became apparent. Dropping home values led to a decrease in household wealth and caused homeowners to reduce their spending.

Step-by-step explanation:

The recent recession that began in 2008 was triggered by the burst of the housing bubble. Signs of the bursting began in 2005 as delinquency and late payments increased and an oversupply of new homes on the market became apparent. Dropping home values led to a decrease in household wealth and caused homeowners to reduce their spending. Several mortgage lenders filed for bankruptcy as homeowners were unable to make their payments, and this issue spread throughout the financial markets. Lenders tightened credit, leading to the housing bubble burst and a crisis in the financial markets.