In the early 2000s, laws requiring banks and mortgage brokers to disclose the terms of home loans:
A. were an example of how the government can act to solve the moral hazard problem.
B. reduced statistical discrimination in the home mortgage market.
C. prevented Americans from entering into mortgage contracts that they did not understand.
D. were so numerous and detailed that borrowers didn't read or understand the information the companies had disclosed.
Answer: D
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Firms will only invest if there are profits in their industry.
Answer the following statement true (T) or false (F)
In the figure above, when the quantity of milk produced is 300 gallons per day, what is the deadweight loss?
A) $62.50 B) $125 C) $200 D) $937.50
How would a negative real shock be represented in the AS/AD model?
A. As a leftward shift of the long-run aggregate supply curve that reduces growth and increases inflation. B. As a rightward shift of the long-run aggregate supply curve that reduces growth and increases inflation. C. As a leftward shift of the long-run aggregate supply curve that increases growth and reduces inflation. D. As a rightward shift of the long-run aggregate supply curve that increases growth and reduces inflation.
When the home construction industry does poorly due to a recession, this is an example of:
A. risk premium. B. unique risk. C. idiosyncratic risk. D. systematic risk.