For the Following Questions, Consult the Diagram Below

question 24

Multiple Choice

For the following questions, consult the diagram below:
Figure 34-1

-Refer to Figure 34-1.At an interest rate of 4 percent there is excess

• A)money demand equal to the distance between a andb
• B)money demand equal to the distance between b and c.
• C)money supply equal to the distance between b and a.
• D)money supply equal to the distance between c and b.

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Definitions:

Secondary Mortgage Market

A market in which mortgages originated by a lender are sold to another financial institution. In recent years, the major buyers in this market have been Fannie Mae, Freddie Mac, and large investment banks.

Lending Standards

The criteria and guidelines used by financial institutions to determine the creditworthiness of prospective borrowers and to make decisions about loan applications.

Housing Prices

The amount of money required to buy homes in a particular area, which can fluctuate based on demand, location, and economic conditions.

Housing Bust

A rapid and significant decline in the housing market, characterized by falling home prices and increased foreclosures.