The Widely Publicized Subprime Lending Crisis Was NOT Caused by

question 60

Multiple Choice

The widely publicized subprime lending crisis was NOT caused by

• A) capital market participants who acted in their own self-interest.
• B) a lack of transparency.
• C) the practice of securitizing assets.
• D) a lack of investor understanding of the investment's true risk.

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Definitions:

Consumption

The act of using goods and services by households, contributing to the overall demand in an economy.

Consumption Function

An economic formula that represents the relationship between total consumption and gross national income.

Disposable Income

The financial resources families have for expenditures and savings after income taxes are removed.

Disposable Income

The total funds available to families for spending and saving after subtracting income tax.