Author Question: The GDP deflator is equal to A) nominal GDP divided by real GDP. B) real GDP divided by nominal ... (Read 59 times)

laurencescou · **on:** Jun 29, 2018

The GDP deflator is equal to

A) nominal GDP divided by real GDP.
B) real GDP divided by nominal GDP, multiplied by 100.
C) real GDP divided by nominal GDP.
D) nominal GDP divided by real GDP, multiplied by 100.

Question 2

Mortgage lenders often resell mortgages in secondary markets. How might this make lenders act differently than if they intended to hold the mortgages themselves?

What will be an ideal response?

nikmaaacs · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

D

Answer to Question 2

Lenders would be more likely to grant mortgages if they intended to resell the mortgages than if they intended to hold them. Reselling reduces the risk of granting mortgages because lenders no longer need to worry that borrowers will default on their mortgage loans.