What was the main reason for "liar loans" to proliferate?

What will be an ideal response?


The incentives to mortgage brokers were such that the more loans they generated, the greater was their compensation. Therefore, the mortgage brokers had no incentive to go behind the scenes to check the viability of repayment.

Economics

You might also like to view...

Suppose a pizza restaurant has two pizza ovens that may be used to bake pizzas, so the restaurant has a maximum capacity constraint that affects the shape of the firm's short-run marginal cost curve

What happens to maximum capacity segment of this curve if the firm adds another pizza oven? A) Shifts upward B) Shifts downward C) Shifts leftward D) Shifts rightward

Economics

An endowment:

A. is the bundle of goods an individual starts out with before trading. B. is the bundle of goods an individual ends up with after trading. C. is the bundle of goods an individual inherits. D. is the bundle of goods and individual donates.

Economics

When net unilateral transfers are added to the net exports of goods and services, the result is called the

a. merchandise trade balance b. official reserve transactions account c. balance of payments d. balance on capital account e. balance on current account

Economics

Which of the following is included in M2 but is not included in M1?

a. Eurodollar deposits b. savings accounts c. traveler's checks d. checkable deposits

Economics