Question

question 9 of 20

which option best describes a factor that contributed to the great recession?

a. investors behaving responsibly on the stock market
b. high unemployment rates after the dot-com bubble burst
c. equalized income between wealthy and low-income people
d. stable house prices and responsible lending practices by banks

Explanation:

Analyze the question and options

The question asks for a factor that contributed to the Great Recession (2007–2009).

Evaluate each option

• A. Investors behaving responsibly on the stock market: Incorrect. Speculative behavior and high-risk investments in complex financial instruments (like mortgage-backed securities) were widespread.
• B. High unemployment rates after the dot-com bubble burst: Correct. The collapse of the dot-com bubble in the early 2000s led the Federal Reserve to lower interest rates to stimulate the economy, which inadvertently helped fuel the housing bubble that eventually triggered the Great Recession.
• C. Equalized income between wealthy and low-income people: Incorrect. Income inequality remained high and did not equalize.
• D. Stable house prices and responsible lending practices by banks: Incorrect. The recession was characterized by a housing market crash and highly irresponsible subprime lending practices.

Select the best option

Option B is the most historically accurate contributing factor among the choices provided.

Answer:

• (A) Investors behaving responsibly on the stock market
• (B) High unemployment rates after the dot-com bubble burst (Correct answer)
• (C) Equalized income between wealthy and low-income people
• (D) Stable house prices and responsible lending practices by banks