Apentix/AP US History/Unit 9: Period 9 (1980-Present)/Question
AP US Historymediummcq1 pt

Which sequence best explains the 2008 financial crisis?

A.Deregulation encouraged risky lending; housing prices fell; mortgage-backed securities lost value, threatening banks
B.Banks failed first, which forced home prices upward
C.Oil prices collapsed, causing a housing boom
D.A balanced federal budget triggered a stock market panic

Explanation

Core Concept

Lenders relaxed standards and bundled subprime mortgages into securities held worldwide. When defaults rose and prices dropped, institutions holding those assets faced insolvency, culminating in the 2008 panic.

Correct Answer

ADeregulation encouraged risky lending; housing prices fell; mortgage-backed securities lost value, threatening banks

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