Author Question: During the Great Recession, securitization: a. Was a major problem because it prohibited mortgage ... (Read 234 times)

rachel9 · **on:** Jun 30, 2018

During the Great Recession, securitization:
a. Was a major problem because it prohibited mortgage originators from reducing their underwriting mistakes by shifting them investors.
b.Was one of the only sources of relief for investors who were suffering heavy losses on their mortgage investments.
c. Was a major cause of the moral hazard problem.
d. None of the above.

Question 2

If a nation repaid its debts by raising taxes, the main effect would be to:
a. Create a wildly inflationary environment.
b. Contract the economy due to the decrease in the monetary base.
c. Expand the economy due to the increase in the monetary base.
d. Redistribute income if the debt was internally held and transfer spending abroad if it was externally held.