How Did the Deregulation of the Mortgage Industry in 1999

question 68

Multiple Choice

How did the deregulation of the mortgage industry in 1999 help produce the housing crisis of
2007 and 2008?

• A)It drove housing prices down by preventing too many qualified people from obtaining the mortgages needed to purchase homes.
• B)It allowed many new mortgage companies to form,offering "predatory" loans that people could not afford to repay.
• C)It made foreclosures almost impossible under the law and allowed many people to stop paying their mortgages with no monetary penalties.
• D)It eliminated most mortgage companies and forced potential homeowners to pay cash for their homes.

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Definitions:

Aggregate Supply

Aggregate supply represents the total amount of goods and services that producers are willing and able to supply at a given overall price level in an economy.

Stock Market Prices

The current price at which a share of a company is bought or sold in the stock market.

Aggregate Demand

The total demand for all goods and services within a particular market over a specific time period.

Aggregate Supply

The total supply of goods and services that firms in an economy plan on selling during a specific time period at prevailing price levels.