In the mortgage securitization process, "tranching" means:
a. Separating mortgage cash flows into securities of varying risks and returns.
b.Pooling risks by combining mortgages with high and low credit ratings.
c. Creating a whirlpool of speculative activity by offering easy credit terms to borrowers who do not have the capacity repay their loans.
d. Creating new incentives for families to own homes.
e. None of the above.
.A
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An increase in checking account balances equals the initial deposit multiplied by total reserves
Indicate whether the statement is true or false
In the short-run, an increase in the average price level in the economy will cause:
a. demand for a good to increase but total production to decline. b. profits to rise and thus, total production to increase. c. interest rates to fall and thus, total production to decline. d. input costs to fall and thus, total production to rise. e. input costs to fall and thus, total production to decline.
In 2011, state and local government education spending was more than five times highway spending
a. True b. False Indicate whether the statement is true or false
"By producing at an output rate at which marginal revenue equals marginal cost, a firm is definitely making positive economic profits." Do you agree or disagree? Why?
What will be an ideal response?