Which of the Following Represents a Collateral Shock

question 183

Multiple Choice

Which of the following represents a collateral shock?

• A) John obtains a mortgage to buy a home for $350,000 with no money down.
• B) James sells his house for $200,000 and has $20,000 left over after paying off the mortgage.
• C) Jack sells his house for $650,000 but is short $50,000 to pay off his mortgage.
• D) Jeff buys a house for $150,000 in cash.

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Definitions:

National Debt

The cumulative amount of money that a government owes to creditors, both domestic and foreign, as a result of borrowing to cover budget deficits.

National Debt

National debt is the total amount of money that a country's government has borrowed, through various means, including foreign governments and domestic investors.

Multiplier

In macroeconomics, a factor that quantifies the effect of increased investment or spending in an economy, typically leading to a proportionally greater increase in income or output.

Multiplier

In economics, the multiplier effect refers to the proportional amount of increase, or decrease, in final income that results from an injection, or withdrawal, of spending.