An originate-to-hold strategy means:
a. Mortgage originators make loans with the intention of having investors purchase and hold them.
b. Mortgage originators make loans with the intention of keeping these assets on their balance sheets.
c.Innovative mortgage loans are more likely to hold investors' interests than standard, run-of-the-mill mortgage loans.
d. Originating loans is a lengthy process that requires originators to hold mortgages for longer periods than they want. Therefore, a strategy is needed for this holding period.
Question 2 - If a government has an active surplus and is below full employment, then:
a. The actual deficit must be less than the passive deficit.
b. The actual deficit must be greater than the passive deficit.
c. The actual deficit must be greater than the active surplus.
d. Fiscal policy must be stimulatory and moving the nation closer to full employment.
Question 3 - A major cause of the Great Recession was:
a. The liberalization of U.S. banking regulations that led to excessive risk taking.
b.Excessive foreign exchange speculation.
c. Contractionary fiscal policies.
d. Excessive money creation by the Federal Reserve immediately before and during the downturn.
e. None of the above.
Question 4 - Which of the following will not cause the aggregate supply curve to fall?
a. A reduction in a nation's level of productivity.
b. An increase in input prices.
c. An increase in the value of the domestic currency.
d. Natural disasters.
Question 5 - Moral hazard occurs when:
a. Individuals and institutions do not bear the full cost of their own mistakes.
b. General social decay leads to unethical business decisions.
c. The actions of one (or a few) result cause harm to others, when the same would not occur if the actions were by many.
d. General social decay leads to unethical business decisions.
e. All of the above are examples of moral hazard.
Question 6 - Which of the following causes the aggregate supply curve to rise?
a. An increase in a nation's level of productivity.
b. A decrease in input prices.
c. An increase in the value of the domestic currency.
d. All of these answers are correct.
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