What is a mortgage? What were the important developments in the mortgage market during the years after 1970?
What will be an ideal response?
A mortgage is a loan a borrower takes to buy a house. Prior to 1970, mortgages were not considered securities—financial assets that are sold in secondary markets. After 1970 Congress helped to create a secondary market in mortgages in order to help the housing market. Congress created the Federal National Mortgage Association ("Fannie Mae") and the Federal Home Loan Mortgage Corporation ("Freddie Mac"). These institutions sell bonds to investors and use the proceeds to buy mortgages from banks and savings and loans. By the 1990s, these developments led to a large secondary market for mortgages.
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If the Canadian dollar price of a United States dollar increases from C$0.80 to C$1.00, it can be concluded that ________.
A. the Canadian dollar has appreciated in value relative to the United States dollar B. the United States dollar has depreciated in value relative to the Canadian dollar C. the Canadian dollar has depreciated in value relative to the United States dollar D. both countries are on the international gold standard
If real GDP equals aggregate planned expenditure, then inventories
A) fall below their target levels. B) rise above their target levels. C) equal their target levels. D) are either above or below their target levels depending on whether planned inventories are above or below their target levels. E) None of the above answers is necessarily correct because there is no relationship between inventories and aggregate planned expenditure.
Normative economic analysis tends to
A) generate testable hypotheses. B) include the way someone thinks things should be or ought to be. C) involve descriptive statements. D) lead to empirical testing of data.
Inflation is a very minor problem for lenders because it is relatively easy to estimate future rates of inflation.
Answer the following statement true (T) or false (F)