Which of the Following Contributed to the Soaring Housing Prices

question 238

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:

Decrease Assets

The reduction in the value or amount of the resources owned by a company, which can result from sales, disposal, or depreciation.

Accounting Equation

The fundamental equation underpinning the double-entry bookkeeping system: Assets = Liabilities + Equity.

Liabilities

The financial liabilities a firm has towards other parties, necessitating reimbursement through the provision of economic gains over a specified duration.

Increase Assets

An action or transaction that results in a rise in the total value of assets owned by an individual or entity.