he sharp increase in housing prices in the lead up to the financial crisis was fueled by all of the following EXCEPT a. ability of borrowers to easily borrow without putting the usual 20% down-payment on the house b. expectations that home prices would continue to increase c. high inflation rates d. deterioration of income and credit requirements on much mortgage lending

he sharp increase in housing prices in the lead up to the financial crisis was fueled by all of the following EXCEPT a. ability of borrowers to easily borrow without putting the usual 20% down-payment on the house b. expectations that home prices would continue to increase c. high inflation rates d. deterioration of income and credit requirements on much mortgage lending

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter8: Savings,investment And The Financial System

Section: Chapter Questions

Problem 4CQQ

See similar textbooks

Similar questions

(true/false and explanation) When nominal interest rates are zero, the central bank can still lower them by printing money and purchasing bonds from banks. This increases the supply of loanable funds and stimulates lending.
Starting in 2009, the interest rates on Greek government bonds rose to over 20%. What was the most important factor in the increase in long-term rates in this time period? Expected future inflation Default risk premium Expectation that the short-term interest rate would be zero “for an extended period” Rise in Greek household savings
According to the theory of liquidity preference, aneconomy’s interest rate adjustsa. to balance the supply and demand for loanablefunds.b. to balance the supply and demand for money.c. one-for-one to changes in expected inflation.d. to equal the interest rate prevailing in worldfinancial markets.
When nominal interest rates are zero, the central bank can still lower them by printing money and purchasing bonds from banks. This increases the supply of loanable funds and stimulates lending.True/False and Explain
Due date: Friday November 20, 2015Too Big to FailAmerican International Group, INC (AIG) caseIntroductionAIG is the story of a company, and its network of financial partners, who tookunprecedented risk and fell because of it. To prevent global economic disaster, the U.S.government came to its rescue. This has resulted in the biggest taxpayer bailout of a privatecompany in American history.BackgroundAmerican International Group, Inc. â€“ also known as AIG â€“ is an Americanmultinational insurance corporation with more than 88 million customers in 130 countries. AIGcompanies employ over 64,000 people in 90 countries. The company operates through three corebusinesses: AIG Property Casualty, AIG Life and Retirement and United Guaranty Corporation(UGC). AIG Property Casualty provides insurance products for commercial, institutional andindividual customers. AIG Life and Retirement provides life insurance and retirement services inthe United States. And UGC focus…
When the economy experiences a business cycle expansion, the demand for bonds ______ as a result of the _____ in wealth, everything else held constant. Select one: decreases; decrease increases; decrease decreases; increase increases; increase
The disadvantages of America's massive issuance of Treasury bonds Simple and short answer plz
Fill-in the correct answer. p i π rr Qtr 1 0.05 0.06 0.03 Qtr 2 0.03 0.07 0.03 Qtr 3 0.02 0.08 0.03 Qtr 4 0.04 0.05 0.03 "_________" Calculate the annual realized real rate of interest."_________" Find the rate of risk."_________" Find the inflation-adjusted principal.
The accompanying graph represents the market for loanable funds in the hypothetical country of Bunko. Assume the market is initially in equilibrium and inflation expectations are 2%. a. Adjust the graph to demonstrate the effects of inflation expectations increasing from 2% to 4%. Market for Loanable FundsInterest rate (%)Quantity of loanable funds (billions of $)02468101214161820012345678910DS b. What is the real interest rate after the change in inflation expectations? 3% 2% 5% 7% c. Which effect below characterizes the relationship between inflation expectations and nominal interest rates? The Leontief Paradox The Inflation effect The Fisher effect The Pigou effect
.......... can be stopped with .......... policy changes that remove the need for .......... (QUESTİON MAY HAVE MORE THAN ONE CORRECT ANSWER.) a.Seigniorage / monetary / borrowing in the open market b. Hyperinflations / fiscal/printing large quantities of money c.printing large quantities of money / monetary / taxes d.Hyperinflations / fiscal / seigniorage e.Open market operations / new tax / selling gold.
Problem 1: In a situation where Area A’s population is younger and Area B’s population is generally old while putting other components constant; will the interest rates in two areas be the same or different? Discuss. PROBLEM 2: Determine how the following situations will affect the nominal interest rate levels: a. There is the anticipated higher government budget deficit. b. The expected inflation in the coming months is high. PROBLEM 8: If short-term interest rates are lower than long-term rates, why might a borrower still choose to finance business operations with long-term debts? Discuss.
Because most loans are written in _________ terms,an unexpected increase in inflation hurts _________.a. real; creditorsb. real; debtorsc. nominal; creditorsd. nominal; debtors