When Housing Prices Fall,as They Did Beginning in 2006 Following

question 221

Multiple Choice

When housing prices fall,as they did beginning in 2006 following the housing market bubble,consumption spending on furniture,appliances,and home improvements ________ as many households found it ________ to borrow against the value of their homes.

• A)declined; easier
• B)declined; harder
• C)increased; easier
• D)increased; harder

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Definitions:

Intercept Point

The exact point on a graph where two lines meet, often used in statistical analysis and economics.

Unsystematic Risk

The risk of price change in a specific security due to factors unique to that security, not affecting the market as a whole.

Unique Risks

The specific uncertainties or dangers associated with a particular investment or company, which are not common to all investments.

Asset-Specific Risks

Asset-Specific Risks are those risks that are unique to an individual asset or investment, such as company performance or sector volatility, as opposed to systemic risks affecting the entire market.