Regulatory Policies Requiring Lenders to Extend More Low Down-Payment Loans

question 101

Multiple Choice

Regulatory policies requiring lenders to extend more low down-payment loans to higher-risk borrowers along with the Fed's low short-term interest rate policy during 2002-2004 caused

• A) an increase in demand for housing and higher housing prices.
• B) an increase in demand for housing and lower housing prices.
• C) a reduction in demand for housing and higher housing prices.
• D) a reduction in demand for housing and lower housing prices.

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Definitions:

Pre-tax Effect

The impact on financial results before the adjustment for taxes has been made.

Units

In accounting and financial reporting, it can refer to a measure of quantity, such as items sold or produced.

Perpetual Inventory System

An inventory management system that updates inventory records for each purchase and sale in real-time.

Gross Method

An accounting practice where purchases are recorded at their gross price without deducting any cash discounts.