Figure 102 Shows the U

question 66

Essay

Figure 10.2 shows the U.S. housing price index (solid line, left axis) and one year adjustable mortgage rates-a proxy for subprime loans (dashed line, right axis). In the context of the housing and financial crisis, discuss the relationship between these two series.
Figure 10.2: Housing prices and one-year adjustable mortgage rates
(Source: Federal Reserve Economic Data, St. Louis Federal Reserve)

---

Definitions:

Naturalism

A philosophical viewpoint that everything arises from natural properties and causes, and supernatural explanations are excluded or discounted.

Individualism Versus Collectivism

A cultural dimension that describes the degree to which a society emphasizes individual achievement and autonomy (individualism) or prioritizes the group and community over the individual (collectivism).

Personal Freedoms

The rights and liberties that allow individuals to express themselves, make personal choices, and live their lives without undue interference from others or the government.

Group Moral Responsibility

The concept that a collective or group can be held ethically responsible for actions taken as a whole.