Explain how a mortgage lender may act differently if it intends to resell mortgages in secondary markets instead of holding the mortgages itself
What will be an ideal response?
A lender would be more likely to grant mortgages if it intends to resell the mortgages than if it intends to hold them. Reselling reduces the risk of granting mortgages because lenders no longer need to worry that borrowers will default on their mortgage loans.
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When producing at a production efficient point, ________
A) our choice of the goods can be either on or within the production possibilities frontier B) we can satisfy our all wants C) the opportunity cost of another good is zero D) we face a tradeoff and incur an opportunity cost
Raising an existing tariff on grapes from Chile will: a. increase U.S. imports of Chilean grapes
b. increase U.S. consumption of domestically produced grapes. c. increase total U.S. consumption of grapes. d. do all of the above.
If the marginal profit of the next unit is negative, the firm should produce more output in order to generate greater profit
a. True b. False Indicate whether the statement is true or false
Which of the following is NOT true about banks?
A. Banks are tightly regulated by state and federal governments. B. Banks are required to keep a certain amount of cash reserves. C. Banks are sellers, not buyers, in the market for money. D. Banks are an example of a financial intermediary.