AP US Historymediummcq1 pt

Which of the following most directly connects 1980s financial deregulation to the savings and loan crisis that followed?

A.New powers let savings and loans invest depositors' money in risky real estate, while federal insurance covered the losses when the investments failed
B.Deregulation required savings and loans to convert into commercial banks
C.Deregulation eliminated all federal deposit insurance
D.Deregulation prohibited savings and loans from making home loans

Explanation

Core Concept

The Garn-St. Germain Act of 1982 let savings and loans move beyond home mortgages into riskier commercial lending. When those loans soured, taxpayers funded the bailout through federal deposit insurance.

Correct Answer

ANew powers let savings and loans invest depositors' money in risky real estate, while federal insurance covered the losses when the investments failed

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