Final answer:
The correct answer is that the Uniform Standards of Professional Appraisal Practice (USPAP) became effective after the formation of The Appraisal Foundation. It was established to improve and standardize appraisal practices, not to lower standards or lead to the collapse of the real estate industry.
Step-by-step explanation:
After The Appraisal Foundation was formed, the Uniform Standards of Professional Appraisal Practice (USPAP) became effective. The creation of USPAP was a significant move to standardize the quality and ethical standards for appraisals throughout the United States, particularly in relation to real estate. It aimed to ensure that appraisals were performed in a consistent and professional manner, thereby protecting both public trust and the interests of all parties involved in property-related transactions.
The other options provided in the question, such as the real estate industry collapsing or the appraisal standards being lowered, were not direct outcomes of the formation of The Appraisal Foundation or the implementation of USPAP. In fact, while the option that the Appraisal Foundation dissolved is incorrect since the foundation continues to exist and oversee appraisals in the United States.
The period referenced with a decrease in the S&P 500 Index and economic downturn relates to the 2007-2009 financial crisis, which had broader economic causes and impacts beyond the scope of The Appraisal Foundation's activities or the real estate appraisal standards.