The Credit Crisis Is Mostly Attributed to the Use Of

question 17

Multiple Choice

The credit crisis is mostly attributed to the use of:

• A)excessively strict criteria applied by mortgage originators.
• B)excessively liberal criteria applied by mortgage originators.
• C)very tough credit ratings applied to mortgages.
• D)fixed-rate mortgages with excessively long terms to maturity.

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Definitions:

Equilibrium Purchase Price

The price at which the quantity of goods demanded by consumers equals the quantity of goods supplied by producers.

Marginal Product

The boost in production resulting from one more unit of input, while keeping other inputs unchanged.

Rental Price

The cost paid periodically by a lessee to use the assets of another entity.

Marginal Product

The additional output that is produced by using one more unit of a factor of production, all other inputs remaining constant.