Federal Housing Administration

question 233

Multiple Choice

Federal Housing Administration:

• A) Agency does not make loans; it only insures them. For this protection the borrower must pay an annual insurance premium to the FHA of 0.5 percent of the outstanding principal amount of the loan
• B) Agency does not make loans; upon default, the lender has the option either of assigning the mortgage to the FHA and receiving cash and/or securities equal to the loan amount at the date of the default or of foreclosing on the mortgaged property
• C) Establishes standards for property that can not be insured and maximum terms, interest rates, and amounts for the insured loans
• D) All of these

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Definitions:

P = MC

The condition where the price of a good equals its marginal cost, representing an equilibrium in perfect competition markets.

Technological Progress

The advancement in technology which increases production efficiency and leads to economic growth.

Demand for Labor

The total amount of labor that employers want to hire at various wage rates.

Marginal Revenue

The additional income earned by selling one more unit of a good or service.