The Fed's Low Short-Term Interest Rate Policy from 2002-2004, Along

question 81

Multiple Choice

The Fed's low short-term interest rate policy from 2002-2004, along with housing regulations promoting low down-payment loans to sub-prime borrowers, encouraged

• A) conventional 30-year, fixed rate mortgages which have relatively high default and foreclosure rates.
• B) conventional 30-year, fixed rate mortgages which have relatively low default and foreclosure rates.
• C) adjustable rate mortgages which have relatively low default and foreclosure rates.
• D) adjustable rate mortgages which have relatively high default and foreclosure rates.

---

Definitions:

Phalangeal

Pertaining to the phalanges, which are the bones in the fingers and toes.

Pedal

Referring to the feet; relating to or operated with the feet.

Scapular

Relating to the shoulder or shoulder blade.

Reduction

The process of decreasing or making something smaller in size, amount, or degree.