Decrease in investment that occurred as result of banks

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Reference no: EM131163026

1. The decrease in investment that occurred as a result of banks being unwilling to lend to businesses after the collapse of the housing bubble caused:

aggregate supply to decrease.

aggregate demand to increase.

aggregate supply to increase.

aggregate demand to decrease.

2. Because local banks earn fees for each loan, their role to:

provide mortgage loans only to those with low credit scores is misaligned with their incentive.

create as many mortgages perfectly aligns with their incentives.

properly assess the risk of each borrower is misaligned with their incentive.

properly assess the risk of each borrower is perfectly aligned with their incentive.

Reference no: EM131163026

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