Exam 33: The Crisis of 2008: Causes and Lessons for the Future

Which of the following makes it difficult for monetary policy-makers to institute policy changes in a manner that will promote economic stability?

What was the original stated purpose of Fannie Mae and Freddie Mac?

Which of the following describes the relationship between interest rates and interest-sensitive goods,such as housing?

Fannie Mae and Freddie Mac held a competitive advantage over other mortgage lenders primarily because

During 1979-2005,the mortgage default rate

Which of the following contributed to the soaring housing prices during 2002-2004?

Which of the following was a contributing factor to the rising default and foreclosure rates beginning in the latter half of 2006?

The increase in the share of loans extended to borrowers with little or no down payment contributed to the financial crisis of 2008 because these loans

Beginning in 2002,Federal Reserve policy

The increase of sub-prime (including Alt-A)loans as a share of the total from 2001-2005 was an important contributing factor to the economic crisis of 2008 because

In 2008-2009,which of the following weakened the demand stimulus effects of expansionary fiscal policy?

Adjustable rate mortgages became increasingly attractive and grew as a percentage of total outstanding mortgages during 2002 to 2004 because

Since 2002,the Fed has shifted to expansionary monetary policy,then to restrictive policy,and then back to expansionary monetary policy.Policy shifts of this type are most likely to

Which of the following is an example of how incentive structures contributed to the collapse of investment banks?

When interest payments on home mortgages and home equity loans are tax deductible,

During 2006-2008,the housing foreclosure rate rose sharply

Which of the following accurately describes the relationship between mortgage default rates and the 2008 recession?

As short-term interest rates began to rise in 2005,which one of the following mortgage loan categories experienced the largest increase in default and foreclosure rates?

The mortgage-backed securities issued by investment banks caused many investment banks to fail when

An analysis of housing prices between 1987 and 2008 indicates that prices