In the early 2000s, the government passed laws requiring banks and mortgage brokers to disclose the terms of home loans. This action by the government was an attempt to:
A. screen out risky or shady banks and mortgage brokers.
B. solve the information asymmetry problem and led to an improvement in the housing market.
C. signal to consumers that the government cared about the value of their homes.
D. solve the information asymmetry problem, but did not work as intended.
Answer: D
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A recession shows
A) supply always equals demand. B) supply never equals demand. C) thousands of businesspeople have misread market signals. D) real GDP must be lower than nominal GDP. E) not enough households are using their credit cards.
To be effective, a price ceiling must be below the market equilibrium price
Indicate whether the statement is true or false
The long-run aggregate supply curve for an economy is always _____
a. vertical b. horizontal c. downward sloping d. upward sloping
Using the production function Real GDP = T (L, K), define the term production function and describe what each of the variables (T, L, and K) represents. When graphed with Real GDP on the vertical axis and labor on the horizontal axis, which variable(s) can shift the production function and which variable(s) can cause a movement along the production function?