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Multiple Choice QuestionDuring the housing bubble in 2007, banks made loans to subprime borrowers. In other words, these loans were made toMultiple choice question.the highest-quality borrowers.government-backed businesses.individuals with low credit ratings.small business owners.

Question

Multiple Choice QuestionDuring the housing bubble in 2007, banks made loans to subprime borrowers. In other words, these loans were made toMultiple choice question.the highest-quality borrowers.government-backed businesses.individuals with low credit ratings.small business owners.

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Solution

The correct answer is: individuals with low credit ratings.

Step by step explanation:

  1. Subprime borrowers are those who are considered to be a higher risk due to their poor credit history.

  2. The term "subprime" refers to the credit status of the borrower, not the type of borrower (i.e., small business owners or government-backed businesses).

  3. Therefore, the loans made by banks during the housing bubble in 2007 to subprime borrowers were made to individuals with low credit ratings.

  4. This is because these individuals are more likely to default on their loans, making them a higher risk for the lender.

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