Securitization is the process by which financial institutions
A) pool together a group of loans and then issue securities backed by the pool.
B) determine the composition of their assets that will yield the optimal amount of security for their financial health.
C) borrow funds from the Federal Reserve and then use those funds to make loans to their customers.
D) determine sub-prime mortgage rates.
A
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Answer the next question using the following budget information for a hypothetical economy. Assume that all budget surpluses are used to pay down the public debt. Government SpendingTax RevenuesGDPYear 1$450$425$2,000Year 25004503,000Year 36005004,000Year 46406205,000Year 56805804,800Year 66006205,000As a percentage of GDP, the
A. budget deficit was 3.9% in year 4. B. budget surplus was less than 1% in year 6. C. public debt was 12.5% in year 1. D. public debt was 3% in year 6.
The attempt to capture consumer surplus, producer surplus, or economic profit is called ________
A) a natural monopoly B) price discrimination C) rent seeking D) gouging
A 10% decrease in real income usually leads to ________ in money demand
A) an increase B) no change C) a decrease of less than 10% D) a decrease of 10%
If the cross price elasticity of demand for fries with respect to hamburgers equals -1.2, then: a. a 1% increase in the quantity of hamburgers purchased will lead to a 1.2% increase in the price of fries
b. a 10% increase in the price of a hamburger will lead to a 12% increase in the quantity of fries demanded at a given price. c. a 1% decrease in the price of a hamburger will lead to a 1.2% increase in the quantity of fries demanded at a given price. d. a 10% increase in the quantity of hamburgers purchased will lead to a 12% increase in the price of fries.