A Good Is Path Dependent When

question 173

Multiple Choice

A good is path dependent when

• A)consumers get utility from consuming goods that others are consuming, such as restaurants.
• B)the first technology that was adopted has an advantage over a better technology that came later.
• C)people who move location follow the path of people who moved before them.
• D)it can only be used in one way.

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Definitions:

Fannie Mae

A government-sponsored enterprise (GSE) established to expand the secondary mortgage market by making mortgages more accessible to low- and middle-income borrowers.

Freddie Mac

A government-sponsored enterprise (GSE) focused on expanding the secondary mortgage market by buying loans from lenders, thereby providing liquidity, stability, and affordability in the housing market.

Secondary Mortgage Markets

Markets where lenders and investors buy and sell existing mortgages or mortgage-backed securities, providing liquidity and capital to the primary mortgage market.

Liquidity

The ease with which an asset can be converted into cash without affecting its market price.