When U.S. house prices began to fall in 2007:
A. most people negotiated lower mortgage rates, so few were forced to sell their houses.
B. banks made it difficult for homeowners to negotiate higher mortgage rates, which led to a decrease in the supply of houses.
C. many Americans were forced to sell their homes because they could no longer take out loans against the rising value of their houses.
D. the demand for affordable housing increased, leading house prices to stabilize.
Answer: C
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The above figure shows the market for blouses. The government decides to impose the sales tax on sellers, as shown in the figure. The tax decreases consumption by
A) 1,000 blouses. B) 2,000 blouses. C) 3,000 blouses. D) 4,000 blouses.
Indifference curves tend to be bowed inward because of diminishing
a. marginal rates of substitution. b. demand for the good as prices rise. c. income. d. Both a and b are correct.
The difference between the nominal interest rate and the real interest rate is:
A. the inflation rate. B. taxes. C. seigniorage. D. hyperinflation.
Refer to the above graph. Which of the following movements would indicate an increase in employment?
a. From point D to point G b. From point C to point D c. From point E to point D d. From point F to point E