Mortgage-Related Securities

question 89

Multiple Choice

Mortgage-related securities:

• A)are securities whose value depends on the value of mortgage-backed securities
• B)came to be known as 'toxic securities'
• C)were erroneously rated as being safe ('AAA')by the ratings agencies
• D)magnified the impact of defaulting sub-prime loans throughout the US financial system.
• E)All of these.

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Definitions:

Aggregate Demand

represents the total demand for all goods and services in an economy at a given time and price level.

Short-Run Aggregate Supply

Represents the total output of goods and services produced in an economy at different price levels over a short period, during which some factors of production are fixed.

Short-Run Aggregate Supply

The total supply of goods and services that firms in an economy plan on selling during a short time period, at different possible price levels.

Money Supply

The money supply refers to the total amount of monetary assets available in an economy at a specific time, including cash, coins, and balances held in checking and savings accounts.