Which of the following contributed to the rising mortgage default and foreclosure rates and the eventual economic crisis of 2008?
a. tightened mortgage lending standards and the reduction of loanable funds during 2001-2005
b. the increase in the greed of Wall Street bankers and other commercial lenders
c. the substantial increase in sub-prime and adjustable rate mortgages as a share of the total during 2001-2006
d. the increase in the household savings rate during the two decades following 1985
e. the increase in fixed rate mortgages as a share of the total during the decade prior to the crisis
C
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Which of the following correctly lists the categories of factors of production?
A) machines, buildings, land, and money B) hardware, software, land, and money C) capital, money, and labor D) owners, workers, and consumers E) land, labor, capital, and entrepreneurship
An expectation may fail to be rational if
A) relevant information was not available at the time the forecast is made. B) relevant information is available but ignored at the time the forecast is made. C) information changes after the forecast is made. D) information was available to insiders only.
James insured his car with a renowned insurance company that checked his driving skills and verified his accident records before insuring his car. After paying two premiums for this insurance, James took to drinking and driving. This action of James is likely to create:
a. an economic loss. b. a positive externality. c. an economic bad. d. a moral hazard. e. diseconomies of scale.
A significant difference between a monopolistically competitive firm and a purely competitive firm is that the:
A. former does not seek to maximize profits. B. latter recognizes that price must be reduced to sell more output. C. former sells similar, although not identical, products. D. former's demand curve is perfectly inelastic.