Which of the Below Statements Is FALSE

question 22

Multiple Choice

Which of the below statements is FALSE?

• A) There are two sets of capital adequacy standards for S&Ls as for banks.
• B) Until the early 2000s, S&Ls and all other lenders financed housing through traditional mortgages at interest rates fixed for the life of the loan.
• C) For S&Ls, if interest rates rise above the interest rate on the mortgage loan, a negative spread will result, which must result eventually in insolvency.
• D) With the high volatility of interest rates in the 1970s, followed by the historically high level of interest rates in the early 1980s, all depository institutions began to lose funds to competitors exempt from ceilings, such as the newly formed money market funds; this development forced some increase in ceilings.

---

Definitions:

Labor Force

The total number of people employed or seeking employment in a country or particular area.

Unemployment Rate

The percentage of people in the labor force who are not currently employed but are seeking work.

Labor Force

The total number of people who are eligible and willing to work, including both employed and unemployed individuals.

Recovery Phase

A period in the economic cycle where economic activity picks up and grows, following a recession or slowdown.