Banks who held mortgage-backed securities "took a bath" during the financial crisis of 2007-2009 due to:
A) rising yields in secondary markets which led to a decline in the price of mortgage-backed securities.
B) falling yields in secondary markets which led to a decline in the price of mortgage-backed securities.
C) their inability to issue new mortgages.
D) more rapid pre-payment of mortgages.
A
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Refer to Figure 21-6. The market is in equilibrium. If the government budget deficit rises, which of the following would you expect to see?
A) The quantity of loanable funds demanded by firms will fall below $120 million. B) The interest rate will fall below 4 percent. C) The quantity of loanable funds demanded by firms will rise above $120 million. D) The budget deficit will have no impact on the quantity of loanable funds demanded by firms.
A profit-maximizing firm will hire inputs until MRP = P of the input.
Answer the following statement true (T) or false (F)