Why did the fall in housing prices lead to bank failures in the U.S. during 2007-2009?
What will be an ideal response?
Falling housing prices led to mortgage delinquencies during 2007-2009. Many people stopped making payment for their mortgages either because they did not have money to pay or because they realized that it was not optimal to keep paying interest on a mortgage that vastly exceeded the value of the home. As a result, the number of home foreclosures increased and banks had no way of recouping the money as the foreclosed houses had to be sold at prices much below their original value.
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One way that the government encourages the production of a good with positive externalities is to offer
A) an effluent fee. B) a market to pollute. C) a subsidy. D) a pollution tax.
The largest portion of any nation's current account is typically
A) imports and exports. B) gold sales. C) the sale of U.S. assets. D) SDRs.
Why is a monopolist's marginal revenue less than the price?
What will be an ideal response?
In general, free-trade makes the people of a country better off.
Answer the following statement true (T) or false (F)