2008 Financial Crisis

ACADEMIC LISTENING TEST PRACTICE
2008 FINANCIAL CRISIS

For Students Preparing for Academic Tests / IELTS and TOEFL
The 2008 financial crisis, also known as the Global Financial Crisis (GFC), was a period
of economic turmoil that began in 2008 and lasted for several years. It was caused by a
combination of factors, including the collapse of the housing market, the failure of major
financial institutions, and the subsequent economic recession.
The crisis began in the United States, where a housing bubble had been growing for
several years. Many people had taken out subprime mortgages, which are loans given to
people with poor credit, to purchase homes they could not afford. As housing prices
started to decline, many of these borrowers were unable to make their mortgage
payments and began to default on their loans. This caused a ripple effect throughout the
financial system, as many of these subprime mortgages had been bundled together and
sold as securities to investors around the world.
The failure of several large financial institutions in the United States, such as Lehman
Brothers, also contributed to the crisis. These institutions had invested heavily in the
subprime mortgage market and were unable to withstand the losses caused by the
housing market collapse. Their failure caused a panic among investors, who began to
withdraw their money from other financial institutions, causing a credit crunch.
The crisis quickly spread beyond the United States and became a global problem. Many
countries were affected by the credit crunch and the resulting economic recession. The
crisis had a severe impact on the global economy, causing businesses to fail,
unemployment to rise, and stock markets to plummet.
The response to the crisis varied among different countries and regions. In the United
States, the government intervened to stabilize the financial system by bailing out major
banks and other financial institutions. In other countries, such as the United Kingdom
and Iceland, governments nationalized failing banks in order to keep them afloat. Many
central banks also lowered interest rates and implemented quantitative easing measures
to try to stimulate economic growth.
Despite these efforts, the crisis had a long-lasting impact on the global economy. Many
countries experienced a period of slow economic growth, high unemployment, and
increased government debt. The crisis also had a major impact on the financial sector,
leading to increased regulation and oversight of banks and other financial institutions.
The 2008 financial crisis also brought attention to the issue of income inequality, as the
crisis had a disproportionate impact on lower-income households. The gap between the
rich and the poor widened as many people lost their jobs and homes, while the wealthy
were able to hold onto their assets.
1. What was the main cause of the 2008 financial crisis?
the collapse of the housing market

the failure of major financial institutions
economic recession
all of the above
2. How did the financial crisis begin in the United States?
Many people had taken out subprime mortgages to purchase homes they could not afford.
the failure of several large financial institutions
A housing bubble had been growing for several years.
none of the above
3. What measures did the US government take to stabilize the financial system?
bailed out major banks

nationalized failing banks
lowered interest rates
none of the above
4. How did the crisis spread beyond the United States?
credit crunch
economic recession
both 'a' and 'b'
none of the above
5. What was the impact of the crisis on the global economy?
The gap between the rich and the poor decreased.

Economic growth was stimulated.
Businesses failed, unemployment rose, and stock markets fell.
none of the above
6. What did the 2008 financial crisis bring attention to?
the issue of income inequality

the importance of effective banking hiring practices
the importance of international cooperation and coordination in addressing economic challenges
none of the above
Discuss these questions with a friend or classmate.

1. What information from this lecture did you find the most interesting? Why?
2. Do you think a similar financial situation could happen again? Why? / Why not?
3. What are the advantages of owning your own home?
4. What do you think about the current global financial situation? How would you
describe it?
5. What are the advantages and disadvantages of keeping your money in a bank?
6. Do you think it's a good idea to invest in the stock market? Why? / Why not?

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ACADEMIC LISTENING TEST PRACTICE

2008 FINANCIAL CRISIS

the collapse of the housing market

2. How did the financial crisis begin in the United States?

bailed out major banks

4. How did the crisis spread beyond the United States?

5. What was the impact of the crisis on the global economy?

The gap between the rich and the poor decreased.

the issue of income inequality

Discuss these questions with a friend or classmate.

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