Chapter 23 Pointed Out Lower Interest Rates Can Lead to Higher

question 11

Essay

Chapter 23 pointed out lower interest rates can lead to higher home prices, and this can lead to increased household spending since homeowners can spend this additional equity.If you were a lender, is there any danger in making loans to homeowners for this new equity or are these really risk-free loans since they are secured by the equity in the house?

---

Definitions:

Dominant Language

This refers to the primary language spoken by the majority of people in a particular area or community, often used in government, media, and education.

Great Britain

An island in the North Atlantic Ocean off the northwest coast of continental Europe that includes the countries of England, Scotland, and Wales.

Cultural Influence

The impact that the beliefs, values, and practices of one culture can have on another.

Cultural Relativism

Cultural relativism is the principle that an individual human's beliefs and activities should be understood by others in terms of that individual's own culture.