Tough one as it was difficult to decide between E and C.
Hidden fact: Government has intervened in the housing market.
Economic experts are arguing that if the govt. had not intervened in the housing market, the economic crisis could have been avoided!
Would or Could?
Would have - Imaginary Past--scenarios in which we can say outcome would be certain if they had happened
e.g. If I had got better GMAT score, I would have gone to Harvard.
So if in the past...I had gotten 780 in GMAT , I would have gone to Harvard for sure. Although Harvard don't consider only GMAT score but still. Bad example
or If I had scored 780 in GMAT, I would have been very happy.--> means if in the past I had scored 780 in GMAT, I would definitely be happy.
Could have - Used for Imaginary past to showcase the chances/possibilities that you didn't had in the real world but in your imaginary world you could have.
e.g. If I had more time, I could have solved all the questions in the verbal section.
or If Novak hadn't lost that first set, he could have lifted that cup at Rolland Garros. (Big RAFA fan Btw
)
So, in my imaginary world, If Novak hadn't lost that first set, he had better chances of winning the match.
Coming back to the actual question: Are the Economic experts arguing that the economic crisis would have been avoided (certainly)...if Govt hadn't intervened in the market? Or Experts are trying to say that there were good chances that the crisis could have been avoided if govt hadn't intervened in the market? IMO they are talking about the possibility.
A) if government would not have intervened in the housing market, the economic crisis would have been avoided.
would ....would Not good
B) the economic crisis would have been avoided if government would not have intervened in the housing market.
--would ....would Not good
besides it's same as A just X and Y are reversed.
C) if government had not intervened in the housing market, the economic crisis could have been avoided.
--Please see the explanation above
D) the economic crisis could be avoided if government did not intervene in the housing market.
--Although the if+simple past+would/could be is the correct structure, but the sentence is missing with the essence of hypothetical scenario. IMO. C is structured in the better way.
E) the economic crisis would have been avoided if government had failed to intervene in the housing market.
--Please see the explanation above
C, IMO.