Suppose the Government Imposes a Policy Which Does Not Allow

question 35

Multiple Choice

Suppose the government imposes a policy which does not allow interest rates in the home mortgage market to rise above a certain level.Given that this level is set below the equilibrium interest rate,which of the following is a consequence of this policy?

• A)There will be a surplus of mortgages in the market.
• B)The demand for mortgages will outstrip supply.
• C)The credit standards for people applying for loans will be tightened.
• D)All the individuals who apply for a mortgage will be able to get one.

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