Which of the Following Statements Is False

question 48

Multiple Choice

Which of the following statements is false?

• A) Mortgage-backed securities, such as GNMAs, are pass-through securities. That is, each security is backed by an underlying portfolio or pool of mortgages.
• B) The Government National Mortgage Association (GNMA, or "Ginnie Mae") is an example of an enterprise; the Student Loan Marketing Association ("Sallie Mae") is an example of a government-sponsored agency.
• C) Sovereign debt is debt issued by national governments.
• D) Agency securities are issued by agencies of the U.S. government or by U.S. government sponsored enterprises.

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Definitions:

Diseconomies of Scale

The situation where long-run average costs start to increase as the scale of operation grows beyond a certain point, leading to increased per-unit costs.

Diminishing Returns

A principle in economics indicating that adding more of one factor of production, while holding others constant, will at some point yield lower incremental per-unit returns.

Constant Costs

Costs that remain the same in total, regardless of changes in the volume of goods or services produced.

Average Variable Cost

The total variable costs of production divided by the quantity of output produced; it shows the variable cost per unit.