The investors who bought mortgage-backed securities just before the housing bubble burst:
A. were not concerned about the original mortgage.
B. were all very comfortable assuming high-risk assets.
C. were not confident in the rising home value underlying each mortgage.
D. knew exactly what they were buying.
A. were not concerned about the original mortgage.
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The long-run Phillips curve:
a. is downward sloping. b. is upward sloping. c. shows there is no tradeoff between unemployment and inflation. d. is horizontal at the natural rate of inflation.
Which of the following is a difference between accounting profit and economic profit?
a. Accounting profit includes only the implicit costs of a firm, while economic profit includes only the explicit costs of the firm. b. Economic profit includes explicit and implicit costs of a firm, while accounting profit includes only explicit costs of the firm. c. Accounting profit is calculated for the current year, while economic profit can be calculated only for previous years. d. Accounting profit is the profit that has already been made by a firm while economic profit is the prediction of the firm's profit in future.