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WorksheetsM/C Borrower Beware QUIZ
Total questions: 10
Worksheet time: 5mins
Which of the following was NOT part of the financial crisis of 2008?
Higher unemployment
Collapse in stock market prices
Sharp rise in consumer prices (inflation)
People lost their homes
According to Mr. Allison, how do banks help the economy the most?
By providing jobs for people
By connecting those who have money with those who want to borrow money
By charging interest rates for loans
By paying interest on savings deposits
What does Mr. Allison believe is the most important factor in deciding whether a bank should give a loan?
The size of the loan
The income of the borrower
The purpose of the loan—what it will be used for
The character of the borrower
What are “Freddie Mac” and “Fannie Mae?"
Government-created lending institutions
Private investment firms
Government agencies that oversee banks
Famous individuals who started banks
What percentage of loans did President Clinton demand to be put in “affordable housing?"
25%
50%
75%
100%
What did Mr. Allison use as another term for “affordable housing?"
fair housing
slums
properly priced homes
subprime loans
According to Mr. Allison, what made a necessary correction into a crisis?
bad loans
over investment in housing
arbitrary government intervention
the Federal Reserve
What was the relationship between the housing market and the financial crisis?
When people lost their jobs, they could no longer afford houses.
When the government stopped subsidizing housing, prices collapsed.
Too many bad loans led to a speculative bubble that ultimately led to a collapse in housing prices.
The financial crisis was caused by the high price of houses.
Why would banks typically avoid the subprime loan business?
Risky loans are less likely to be repaid.
Banks don’t want to charge an unfair interest rate.
Banks don’t want to deal with poor people.
Banks only loan money to people the government tells them to.
What was the clearest purpose of the TARP program?
To restore confidence in the US financial system
To put homeless people into temporary shelters
To restart the economy by closing bad banks
To rescue failing financial institutions
