26-7 Despite the Complexity of Measuring the Risk of Asset-Backed

question 4

True/False

26-7 Despite the complexity of measuring the risk of asset-backed securities,credit rating agencies continued to use their own measures to quantify risks involved.

---

Definitions:

Normal Goods

Goods for which demand increases when consumer income increases and vice versa.

Income Effect

The change in an individual's consumption resulting from a change in their real income, affecting their purchasing power.

Normal Good

A type of good for which demand increases as the income of individuals or the economy grows.

Substitution Effect

The substitution effect occurs when consumers replace more expensive items with less costly alternatives.