Securitization of Assets Became More Popular Because It Enabled Banks

question 5

True/False

Securitization of assets became more popular because it enabled banks to generate additional reserve assets on its books and thus allowed them to expand lending.

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Definitions:

Short Run

A period in economics during which some factors of production are fixed, limiting the ability of a business to fully adjust to market changes.

Long Run

An economic term referring to a period during which all inputs or factors of production can be varied, and there are no fixed constraints.

Average Fixed Costs

The fixed costs (those not changing with output level) of production divided by the quantity of output produced.

Marginal Cost

The extra expense incurred from manufacturing an additional unit of a product or service.