Because local banks earn fees for each loan, their role to:
A. create not many mortgages perfectly aligns with their incentives.
B. properly assess the risk of each borrower is perfectly aligned with their incentive.
C. properly assess the risk of each borrower is misaligned with their incentive.
D. provide mortgage loans only to those with low credit scores is misaligned with their incentive.
Answer: C
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Use the saving and investment equation to explain why the United States experienced large current account deficits in the late 1990s
What will be an ideal response?
If a government chooses to finance a budget deficit by borrowing and the expected inflation rate does not change, this will cause the real interest rate to ________ and the nominal interest rate to ________
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease
Competing-interest legislation is characterized by
a. concentrated costs and concentrated benefits b. concentrated benefits and widespread costs c. widespread benefits and widespread costs d. widespread benefits and concentrated costs e. zero costs
Suppose hypothetically that the consumer price index (CPI) was 150 in Year 1 and was 180 in Year 2 . What would be the inflation rate for this period?
a. 12 percent. b. 16.7 percent. c. 20 percent. d. 30 percent.