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As a Result of the Subprime Collapse,the Demand for Low

question 33

Multiple Choice

As a result of the subprime collapse,the demand for low -quality corporate bonds ________,the demand for high-quality Treasury bonds ________,and the risk spread ________.


Definitions:

Disposable Income

The income left over for personal spending after direct taxes have been subtracted from an individual’s gross income.

Consumption

The use of goods and services by households or individuals, typically relating to spending on products and services.

Permanent Income Hypothesis

A theory suggesting that a person's consumption at a point in time is determined not just by their current income but by their longer-term income expectations.

Consumer Binge

A period characterized by excessive spending and consumption by consumers.

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