Which of the Following Contributed to the Soaring Housing Prices

question 114

Multiple Choice

Which of the following contributed to the soaring housing prices during 2002-2004?

• A) the Fed's high-interest rate policy
• B) the tightening of loan standards by commercial lenders
• C) the increasing popularity of fixed-rate, long-term loans to lock in low interest rates
• D) the Fed's low-interest rate policy

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Definitions:

NPV

Net Present Value (NPV) is a method used to evaluate the profitability of an investment, calculating the difference between the present value of cash inflows and outflows.

Leveraged Lease

A financing arrangement where a lessor uses borrowed funds to purchase an asset, which is then leased to a third party, helping businesses acquire expensive equipment with less capital.

Direct Lease

A lease agreement directly between the lessor and lessee, excluding intermediaries, typically for commercial properties or automobiles.

Manufacturer

A company or individual that produces finished goods from raw materials through the use of tools, human labor, machinery, and chemical processing.