By the height of the housing bubble in 2005 and early 2006, lenders had greatly loosened the standards for obtaining a mortgage loan, with many mortgages being granted to sub-prime borrowers ________ and "Alt-A" borrowers ________
A) with flawed credit histories; who did not document their incomes
B) who borrowed money at rates below the prime interest rate; who had AAA credit ratings
C) who borrowed more than 120 percent of the value of the house; with no proof of U.S. citizenship
D) who purchased homes in depressed housing markets; who purchased homes which were repossessed by government agencies.
Answer: A
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If the government's spending exactly equals its revenues during a budget year, that government is
A) running a budget deficit. B) experiencing a budget surplus. C) balancing its budget. D) paying off its public debt.
If the government decides to spend an extra $5 billion on fighter jets that they would otherwise have spent on road construction, and the MPC = 0.75, what is the effect on AD? a. It has no effect
b. It increases by $5 billion. c. It increases by $15 billion. d. It increases by $20 billion.
Profit maximizing (or loss minimizing) level of output
A. is OR.
B. is OS.
C. is OT.
D. None of the choices are correct.
The owner of a restaurant is considering lowering menu prices to draw in more customers. He is debating between lowering the price for the steak entrée or the salmon entrée. When he lowered prices last year, a $2.00 decrease in price for the $15
steak resulted in a growth in steak sales from 75 per week to 100 per week. A $2.50 decrease in the price of the $17 salmon entrée increased sales from 40 to 75 meals per week. Which entree should he choose to put on sale? Please provide the best answer for the statement.