Macroeconomics Study Set 48
Quiz 2: Economic Models: Trade-Offs and Trade
The Value of a Mortgage-Backed Security Is Tied to the Interest
The value of a mortgage-backed security is tied to the interest on the national debt paid by the Federal Reserve.
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After 2000, the market for mortgage-backed securities grew rapidly because Wall Street financial theorists claimed they had a model that could accurately assess what their price should be.
On any given production possibility frontier, we see the minimum quantity of one good that can be produced for any given production of the other.
Suppose residents of Montana operate on their production possibility frontier, and they want to increase production of both wheat and fly-fishing rods. According to the production possibility frontier, this cannot happen without new resources or technological improvement.
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