Topic: The Financial Crisis and Subprime Mortgages
Activity 1: Multiple-Choice Questions
- Topic: The Financial Crisis and Subprime Mortgages
- Level: C1 (Advanced)
- Write a three-paragraph article on the topic, using eloquent and corporate vocabulary.
- Create a multiple-choice question with four options based on the article. One option should be correct, and the others should offer different perspectives or opposing views.
Example:
Article:
The financial crisis of 2007-2008, often referred to as the Global Financial Crisis (GFC), was a severe worldwide economic crisis considered by many economists to be the most serious financial crisis since the Great Depression. The crisis began with the bursting of the United States housing bubble, which led to a dramatic increase in mortgage delinquencies and foreclosures. At the heart of the crisis were subprime mortgages, high-risk loans offered to borrowers with poor credit histories.
Financial institutions heavily invested in mortgage-backed securities, which were believed to be low-risk. However, when homeowners began defaulting on their mortgages, the value of these securities plummeted. This triggered a cascade of financial failures, leading to the collapse of major financial institutions and a significant downturn in global economic activity. The crisis exposed significant vulnerabilities in the financial system, prompting calls for regulatory reforms to prevent a recurrence.
In response to the crisis, governments and central banks around the world implemented unprecedented measures to stabilize the financial system. These included bank bailouts, economic stimulus packages, and lower interest rates. While these actions helped to avert a complete economic collapse, the aftermath of the crisis was marked by prolonged unemployment, decreased consumer confidence, and increased regulatory scrutiny of financial markets.
Question:
Which statement best reflects the main idea of the article?
A. Subprime mortgages were a minor factor in the financial crisis.
B. The financial crisis was solely caused by government policies.
C. The financial crisis exposed vulnerabilities in the financial system and led to significant economic downturn.
D. Mortgage-backed securities remained valuable throughout the crisis.
Correct Answer: C. The financial crisis exposed vulnerabilities in the financial system and led to significant economic downturn.
Activity 2: Grammar and Reading Comprehension
- Topic: The Financial Crisis and Subprime Mortgages
- Level: C1 (Advanced)
- Grammar Point: Passive voice, phrasal verbs, and tenses
- Write a detailed article about the topic, incorporating the selected grammar point.
- Create three questions:
- One about passive voice.
- One about phrasal verbs.
- One about English tenses.
Example:
Article:
The financial crisis of 2007-2008 was triggered by the collapse of the housing market in the United States. Subprime mortgages were granted to borrowers with low credit scores, and these high-risk loans were packaged into mortgage-backed securities. As homeowners defaulted on their loans, the value of these securities dropped significantly, causing widespread financial instability.
Measures to stabilize the economy were swiftly implemented by governments and central banks. Interest rates were lowered, and stimulus packages were introduced to inject liquidity into the financial system. However, the crisis had already taken a toll, leading to widespread unemployment and a loss of consumer confidence.
In the aftermath, the financial industry faced increased regulatory scrutiny. New regulations were enacted to prevent a similar crisis in the future, and financial institutions were required to maintain higher levels of capital. Despite these efforts, the repercussions of the crisis were felt globally, affecting economies and individuals worldwide.
Questions:
- Passive Voice:Which sentence uses the passive voice correctly?A. “Subprime mortgages were granted to borrowers with low credit scores.”B. “Governments and central banks implemented measures to stabilize the economy.”C. “Homeowners defaulted on their loans.”D. “The financial industry faced increased regulatory scrutiny.”Correct Answer: A. “Subprime mortgages were granted to borrowers with low credit scores.”
- Phrasal Verbs:Which phrasal verb indicates the initiation of a process?A. “Set up”B. “Bring about”C. “Carry out”D. “Put in”Correct Answer: A. “Set up” (e.g., “Governments set up stimulus packages.”)
- English Tenses:Which sentence uses the past perfect tense correctly?A. “Homeowners had defaulted on their loans before the crisis escalated.”B. “Governments introduce new regulations.”C. “Interest rates are being lowered.”D. “The financial crisis impacts the global economy.”Correct Answer: A. “Homeowners had defaulted on their loans before the crisis escalated.”