Which of the following factors led to the housing bubble in the U.S. in 2006?
a. Increased amount of lending to subprime borrowers
b. Decreased money supply by Federal Reserve
c. Future expectation about downward movement of prices of the houses
d. Federal Reserve raised the market rate of interest
e. Increase in the supply of houses
a
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Consider the above figure. If the aggregate demand curve rose from AD1 to AD3, our nation would be experiencing
A) falling prices. B) an inflationary ga
What is the present value of $575 in a one year if the current rate of interest is 4 percent?
A) $410.71 B) $552.88 C) $598 D) $805
The unemployment rate is the number of unemployed people, expressed as
a. a ratio of total employed to the population. b. a ratio of unemployed to the total employed. c. a percentage of the labor force. d. a percentage of the population.
Other things constant, an increase in the expected inflation rate will
a. decrease the inflationary premium. b. increase money (nominal) interest rates. c. increase the supply of loanable funds. d. decrease the money interest rate.