During the 1970s homeowners in California borrowed money at 10 percent interest rates per year because the growth rate in the value of housing prices exceeded:

Question

Quizplus · Accepted Answer

Homeowners borrowed money at high interest rates because they believed that the growth rate in the value of housing prices was greater than the interest rate they would have to pay, and that this trend would continue. Option A accurately describes this scenario. Option B implies that homeowners were aware that the trend would end soon, which is not necessarily the case. Option C suggests an excessively high growth rate in housing prices, which is unlikely. Option D describes a growth rate that is too low to justify such high interest rates on loans.

During the 1970s Homeowners in California Borrowed Money at 10