Which of the Following Is Not an Example of Aggressive

question 9

Multiple Choice

Which of the following is not an example of aggressive lending practices contributing to the subprime crisis?

• A)Mortgagors were not required to make any down-payment at the inception of the loan
• B)Loans were given to people with poor credit histories
• C)Loans were given to people with no income
• D)A borrower could get a second mortgage and use it as down-payment
• E)None of the above

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Definitions:

Total Reserves

The sum of a bank's deposits held at the central bank and the cash held in vaults.

Checkable Deposits

Refers to deposits in bank accounts from which individuals can write checks or use debit cards to make purchases directly.

Required Reserves

The minimum amount of funds that a bank must hold in reserve against deposits, as mandated by central banking regulations.

Money Supply

Refers to the total amount of money—cash, coins, and balances held in checking and savings accounts—available within an economy at a specific time.