What was the source of the problems encountered by many financial firms during the late 2000s?
What will be an ideal response?
The primary source of the problems was that financial firms began securitizing home mortgages. This created a large increase in mortgages being granted to "sub-prime" borrowers, who are borrowers with flawed credit histories, and "Alt-A" borrowers, who did not have to document their incomes when applying for mortgages. When housing prices began falling in 2006, many of these borrowers began to default on their mortgages, causing many financial institutions to suffer heavy losses.
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According to the Application, the differential survival of the wealthy created an environment
A) which allowed for economic growth. B) where lower-class people could no longer afford to live in the country. C) that directly led to the demise of the British monarchy. D) which caused increased class warfare.
The fact that exchange rates are nearly identical in different markets around the world is due to
a. the actions of speculators b. official action by central banks around the world c. the actions of arbitrageurs d. agreement by policy makers of the major industrial countries e. the actions of currency converters
Which of the following statements is correct about Temporary Assistance to Needy Families (TANF)?
A. Families may not receive benefits for longer than 60 months. B. The Federal program determines eligibility and benefit levels with no discretion left to the state. C. Unwed teenage parents receiving benefits must live in public housing. D. Parents with children under age one must work 20 hours per week to receive benefits.
Relative poverty refers to
A) how a family's income compares to the incomes of those around them. B) poverty levels at a stated income cutoff. C) the number of poor in one state relative to another. D) none of the above.