The Housing Bubble Prior to 2007 Was Driven Primarily by

question 27

Multiple Choice

The housing bubble prior to 2007 was driven primarily by

• A)the large population growth stemming from legal and illegal immigration between
• 1990 and 2005.
• B)the increased demand for housing that resulted from a dramatic loosening of lending standards.
• C)innovations in construction technology that allowed for new homes to be built at drastically reduced costs.
• D)the federal government's decision to quadruple the mortgage interest deduction in 2003.

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Definitions:

Indifference Curve

A graph showing different bundles of goods between which a consumer is indifferent, helping to illustrate preferences and the concept of utility.

Budget Line

A visual depiction of every combination of two items that can be bought within a specified budget at constant prices.

Costs More

Refers to an increase in financial expenditure or the necessity to spend more money on a specific item or service.

Indifference Schedule

A tabular representation showing combinations of goods between which a consumer is indifferent, reflecting similar preferences as an indifference map.