Which of the Following Contributed to the Soaring Housing Prices

question 34

Multiple Choice

Which of the following contributed to the soaring housing prices during 2002-2005?

• A) The Fed's low-interest rate policy.
• B) Regulations that reduced the required down payment and other lending standards for home mortgages.
• C) The increased leverage lending by Fannie Mae, Freddie Mac, and large investment banks.
• D) All of the above.

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Definitions:

Pollution Rights

Permits or allowances that grant entities the right to emit a certain amount of pollutants into the environment.

External Benefit

A positive effect experienced by a third party who did not choose to incur that benefit, often associated with public goods or services.

Social Value

The importance or benefits a project, policy, or action brings to the community or society at large, beyond just economic gains.

Private Cost

The cost incurred by an individual or company in producing goods or services, excluding externalities.