How did securitization and the bursting of the housing bubble contribute to the Financial Crisis of 2007-2009?
What will be an ideal response?
Many investment banks and other investors purchased mortgage-backed securities because they paid higher interest rates than securities of comparable default risk. When the housing bubble burst, the value of the mortgage-backed securities declined significantly, resulting in massive losses for those who owned them, including many investment banks.
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When quotas are eliminated, losers include
A. Domestic producers. B. Foreign producers. C. There are no losers when free international trade is established. D. Domestic consumers.
Which of the following explains why the marginal cost curve has a U shape?
A) Initially, the marginal product of labor falls, then rises. B) Initially, the average product of labor rises, then falls. C) Initially, the marginal product of labor rises, then falls. D) Initially, the average cost of production rises, then falls.
Which of the following government policies or programs would be most appropriate to offset cyclical unemployment?
A. Additional health services to counter the effects of unemployment. B. Additional job placement services. C. Those that stimulate more demand. D. More job training.
What is the likely consequence of an unemployment rate falling below the rate at which "full employment" is achieved?
A. The threat of recession. B. An increase in discouraged workers. C. Increased inflationary pressures. D. None of the choices are correct.