In mid-2006, delinquency and foreclosure rates rose, leading to a financial crisis.
1. State two reasons for the rise in delinquency and foreclosure rates in mid-2006.
2. Explain how rising delinquency and foreclosure rates led to bank insolvencies.
3. Describe how problems in the financial sector affected the real sector.
4. Describe how problems in the real sector can feed back to the financial sector.