Question 1

After World War II, home values:

Accepted Answer

A)   fell immediately.
B)   steadily increased alongside economic expansion, but decreased during times of recession.
C)   seemed immune to the business cycle.
D)   were eroded by high inflation.E) All of the above
F) None of the above

Question 2

The decrease in consumer spending that occurred after the collapse of the housing bubble caused aggregate:

Accepted Answer

A)   demand to increase.
B)   demand to decrease.
C)   supply to increase.
D)   supply to decrease.E) A) and B)
F) C) and D)

Question 3

As the housing market took off in the early 2000s:

Accepted Answer

A)   household debt decreased.
B)   the growth in household debt slowed.
C)   the growth in household debt accelerated.
D)   household debt stayed roughly comparable to historical levels.E) C) and D)
F) A) and D)

Question 4

The practice of dividing packages of debts into slices, each with different risk and return characteristics, is called:

Accepted Answer

A)   leveraging.
B)   bundling.
C)   pooling.
D)   tranching.E) A) and B)
F) A) and C)

Question 5

The decrease in investment that occurred as a result of pessimism about the health of the economy after the collapse of the housing bubble caused aggregate:

Accepted Answer

A)   demand to increase.
B)   demand to decrease.
C)   supply to increase.
D)   supply to decrease.E) C) and D)
F) B) and D)

Question 6

The housing bubble refers to:

Accepted Answer

A)   housing prices rising much more quickly than other prices in the economy.
B)   a sudden sell-off of houses in major metropolitan areas.
C)   an unexplained shortage of labor in construction, inflating the cost of new homes.
D)   consumers buying homes and land in rural areas to take advantage of lower prices.E) C) and D)
F) All of the above

Question 7

78. Over the two decades leading up the 2008 crisis, _______ interest rates meant that consumers could take on _______ debt without significantly increasing the amount of debt service they had to pay.

Accepted Answer

A)   falling; more
B)   rising; more
C)   falling; less
D)   rising; lessE) All of the above
F) A) and C)

Question 8

Which of the following describes a margin call?

Accepted Answer

A)   A broker forces a person in danger of running through their money to sell their stock and use the money to pay back their loan.
B)   A market reaches a tipping point, and policy-makers have to decide whether to intervene and prop up struggling financial institutions.
C)   Prices on future values of a stock are forecasted to be lower than current prices.
D)   Prices on future values of a stock are forecasted to be higher than current prices.E) All of the above
F) A) and B)

Exam 17: Financialcrisis

The decrease in consumer spending that occurred after the collapse of the housing bubble caused aggregate:

Correct Answer
verified

After World War II, home values:

Correct Answer
verified

As the housing market took off in the early 2000s:

Correct Answer
verified

The decrease in investment that occurred as a result of pessimism about the health of the economy after the collapse of the housing bubble caused aggregate:

Correct Answer
verified

Which of the following describes a margin call?

Correct Answer
verified

The housing bubble refers to:

Correct Answer
verified

The practice of dividing packages of debts into slices, each with different risk and return characteristics, is called:

Correct Answer
verified

78_.Over the two decades leading up the 2008 crisis, _ interest rates meant that consumers could take on _ debt without significantly increasing the amount of debt service they had to pay.

Correct Answer
verified

Exam 17: Financialcrisis

The decrease in consumer spending that occurred after the collapse of the housing bubble caused aggregate:

Correct AnswerverifiedShow Answer

After World War II, home values:

Correct AnswerverifiedShow Answer

As the housing market took off in the early 2000s:

Correct AnswerverifiedShow Answer

The decrease in investment that occurred as a result of pessimism about the health of the economy after the collapse of the housing bubble caused aggregate:

Correct AnswerverifiedShow Answer

Which of the following describes a margin call?

Correct AnswerverifiedShow Answer

The housing bubble refers to:

Correct AnswerverifiedShow Answer

The practice of dividing packages of debts into slices, each with different risk and return characteristics, is called:

Correct AnswerverifiedShow Answer

78. Over the two decades leading up the 2008 crisis, _______ interest rates meant that consumers could take on _______ debt without significantly increasing the amount of debt service they had to pay.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

78_.Over the two decades leading up the 2008 crisis, _ interest rates meant that consumers could take on _ debt without significantly increasing the amount of debt service they had to pay.

Correct Answer
verified