If a Bank Offers Mortgages That Do Not Require the Normal

question 79

Multiple Choice

If a bank offers mortgages that do not require the normal 20% down payment,the bank encourages

• A) people who know they might not pay off the mortgage.
• B) people who can't afford the down payment but can pay off the mortgage.
• C) people who know that they are going to pay off the mortgage.
• D) people who know they can't pay off the mortgage but who can afford the down payment.

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Definitions:

Credit Card

A payment card issued by financial institutions that lets cardholders borrow funds with which to pay for goods and services.

Money Supply

The total amount of money available in an economy at a particular time.

Official Money Supply

The total amount of monetary assets available in an economy at a specific time, as measured and published by the central bank.

Precautionary Demand

The desire to hold cash or liquid assets as a safeguard against potential financial emergencies.