Which of the Following Statements Reflect the Primary Change in the Mortgage

question 79

Multiple Choice

Which of the following statements reflect the primary change in the mortgage market that played the major role in creating the housing crises in 2007 through 2009?

• A)Low interest in the mid 2000's.
• B)Adjustable rate mortgages to low income citizens with low credit scores.
• C)The large increase in interest rates in 2007.
• D)The reduction in newly constructed housing.

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Definitions:

Variable Manufacturing Overhead

Costs of manufacturing overhead that vary directly with the level of production, such as utilities used in the production process.

Product Costs

Costs directly associated with the production of goods, including materials, labor, and manufacturing overhead.

Absorption Costing

A costing method that includes all manufacturing costs — direct materials, direct labor, and both variable and fixed manufacturing overhead — in the cost of a product.

Variable Costing

An accounting method that includes only variable manufacturing costs—direct materials, direct labor, and variable manufacturing overhead—in product costs.