Question

Dr. Bernanke argued two problems contributing to the financial crisis included:________.

A. banks reliance on long-term funding; and the increased use of non-standard mortgages such as Adjustable Rate Mortgages ARMS.
B. banks reliance on short term funding; and the increased use of non-standard mortgages such as Adjustable Rate Mortgages ARMS.
C. banks reliance on short term funding; and the increased use of non-standard mortgages such as fixed rate, 30-year mortgages.
D. banks reliance on long-term funding; and the increased use of non-standard mortgages such as fixed rate, 30-year mortgages.

Answer 1

D. banks reliance on long term funding; and increased use of non-standard mortgages such as fixed rate, 30- year mortgages.

Step-by-step explanation:

Dr. Bernanke argued that financial crisis is due to the banks involving in non standard mortgages which are fixed rate mortgages but they are not regulated. The bank provides loans and mortgages to people based on the standard regulations which need to be followed. They financial crisis took place when the mortgages were provided on non standard terms.