When Subprime Mortgage Loans Were First Sold, They Were a Profitable

question 23

True/False

When subprime mortgage loans were first sold, they were a profitable investment for the banks that sold them but proved to be a bad deal for home buyers.

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Definitions:

Quantity Demanded

The total amount of a good or service that consumers are willing and able to buy at a specific price.

Market Equilibrium

A situation in a market where the quantity of a product demanded by consumers equals the quantity supplied by producers.

Price Ceiling

A government-imposed limit on how high a price can be charged for a product, service, or resource, typically set below the equilibrium price.

Shortage

A situation in which the demand for a product or service exceeds the supply available at a particular price.