When the housing bubble began to burst in 2006, investors became
A) more likely to purchase mortgage-backed securities since mortgage values had declined significantly, making the securities a better value.
B) less likely to purchase mortgage-backed securities since the default rate on mortgages began to rise.
C) more likely to purchase mortgage-backed securities since the higher rate of return made these investments much more profitable.
D) less likely to purchase mortgage-backed securities since the government virtually took over the mortgage market.
B
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A dining table costs $3,000 in New York and same table costs 5000 euros in Rome. If absolute PPP holds, $1 is equal to
A) 1 euro B) 2 euros C) 5/3= 1.67 euros D) 3/5= 0.6 euros
In an economic system with privately owned, profit-maximizing banks, there will always be a difference between
a. private profits and social profits. b. bank profits and other corporate profits. c. bank profits and macroeconomic objectives. d. bank profits and government profits.