During 2007, many "subprime" and "Alt-A" borrowers began to default on their mortgages. Describe "subprime" and "Alt-A" borrowers
What will be an ideal response?
"Subprime" borrowers are borrowers whose credit histories include failures to make payments on bills. "Alt-A" borrowers are borrowers who fail to document that their incomes are high enough to afford their mortgage payments.
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By shutting down when price is less than average variable cost at the profit-maximizing level of output, a perfectly competitive firm will limit its losses to its:
A) total variable costs. B) total costs. C) total fixed costs. D) marginal costs.
The slope of the labor-leisure budget constraint represents the tradeoff between leisure and income
a. True b. False Indicate whether the statement is true or false
A subsidy on a product will generate more actual benefit for producers (and less for consumers) when
a. the supply of the product is relatively inelastic. b. the supply of the product is relatively elastic. c. the demand for the product is relatively inelastic. d. either b or c is true
If the dollars per euro exchange rate increased,
a. Americans would purchase fewer European goods b. more U.S. firms would want to relocate to Europe c. more American tourists would travel to Europe d. the demand for euros would increase e. Europeans would become more highly respected