The Two Government Sponsored Enterprises (GSEs) That Sell Bonds and Use

question 21

Multiple Choice

The two government sponsored enterprises (GSEs) that sell bonds and use the proceeds to purchase mortgages are

• A)Fannie Mae and Freddie Mac
• B)Ginnie Mae and Housing and Urban Development (HUD)
• C)Ginnie Mae and Daisy Mae
• D)Freddie Mac and Housing and Urban Development (HUD)

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Definitions:

Fixed Costs

Expenses that do not vary with the level of production or sales, such as rent, salaries, and insurance premiums.

Break-even Point

The point at which total costs and total revenues are equal, meaning there is no profit or loss.

Unit Selling Price

The amount of money charged for one unit of a product or service.

Unit Variable Cost

The cost associated with producing one additional unit of a product, which can vary with the level of production output.