During the Recession Phase of the Business Cycle,households Become Pessimistic

question 105

Multiple Choice

During the recession phase of the business cycle,households become pessimistic about their future earning capacity as do banks.Nominal interest rates fall during recessions.Mortgage lending could be expected to

• A)rise if the change in future earnings is thought to be greater than the change in interest payments.
• B)stay the same.
• C)fall.
• D)fall if the change in future earnings is thought to be greater than the change in interest payments.

---

Definitions:

Political Considerations

Factors involving politics or political influence that impact decision-making or the outcome of situations.

Business Negotiations

The process of reaching an agreement within a business context, often involving contracts, terms of service, or prices.

High-conflict Situations

Scenarios characterized by intense disagreement or confrontation, often requiring special strategies or approaches to manage and resolve effectively.

Ethnicity

A social category that groups people based on common cultural, ancestral, or national characteristics.