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EC250 - Intermediate Macro: Midterm
Questions with Detailed Verified
Answers
two variables that fell equally as much in both recessions
Ans: inflation and foreign trade
current recession
Ans: unemployment fell but average earnings increased
output declined is the service producing industries the most-15%
prime mortgages
Ans: lower interest rates than sub-prime loans
why the lehman brothers collapsed
Ans: borrowed in short-term market and invested in real estate
did not obtain a loan from federal reserve
unable to quickly sell real estate holdings
when was the great recession? and why did it start
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Ans: 2008- june 2009
(technically started in december 2007)
collapse of the housing market , fueled by low interest rates, easy credit,
and insufficient regulation
buying a house and borrowing 75%... what is leverage?
Ans: leverage = 100/25 = 4
why was there an increase in US house prices
Ans: due to improvements in the financial system
during the great recession how was the banking crisis in Canada compared to
the US
Ans: the banking crisis in Canada was less severe
marijuana becoming legal... what happened to GDP
Ans: GDP increased
GNP = GDP
EC250 - Intermediate Macro: Midterm
Questions with Detailed Verified
Answers
two variables that fell equally as much in both recessions
Ans: inflation and foreign trade
current recession
Ans: unemployment fell but average earnings increased
output declined is the service producing industries the most-15%
prime mortgages
Ans: lower interest rates than sub-prime loans
why the lehman brothers collapsed
Ans: borrowed in short-term market and invested in real estate
did not obtain a loan from federal reserve
unable to quickly sell real estate holdings
when was the great recession? and why did it start
, Page | 2
Ans: 2008- june 2009
(technically started in december 2007)
collapse of the housing market , fueled by low interest rates, easy credit,
and insufficient regulation
buying a house and borrowing 75%... what is leverage?
Ans: leverage = 100/25 = 4
why was there an increase in US house prices
Ans: due to improvements in the financial system
during the great recession how was the banking crisis in Canada compared to
the US
Ans: the banking crisis in Canada was less severe
marijuana becoming legal... what happened to GDP
Ans: GDP increased
GNP = GDP
