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Problem: During of the financial crisis and Great Recession, many home owners in the United States are said to be underwater: the value of their real estate fell below the value of their mortgage. Suppose that Laura, a home owner, had a positive wealth in 2008. In 2009, unfortunately, her wealth is negative. Does this evidence necessarily imply that Laura dissaved over 2009? Explain. (Hint: Think about endogenous and exogenous factors of wealth accommodation.)
This document contains various important questions and their appropriate answers in the subject field of Economics.
Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.
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