Why did the housing boom of 1997-2006 show evidence of time bunching? I. As banks began to increase their portfolio of mortgage loans, more and more banks began to offer fast mortgage loans in hopes of making more profit. II. As builders saw the increase in home building, they also jumped on the bandwagon and started building new homes in hopes of making greater profits. III. As consumers saw other consumers purchasing houses in anticipation of rising prices, they also purchased new homes in hopes of increasing their wealth.
A) I only
B) I and II only
C) II and III only
D) I, II, and III

Question

Quizplus · Accepted Answer

The housing boom of 1997-2006 showed evidence of time bunching because all three options (I, II, and III) contributed to the phenomenon. As banks increased their mortgage portfolios and offered fast mortgage loans (I), builders noticed the increase in home building and also began to build new homes (II). Finally, as consumers saw others purchasing homes, they too bought homes in hopes of increasing their wealth (III). All three factors contributed to a rush of activity in the housing market, resulting in time bunching.

Why Did the Housing Boom of 1997-2006 Show Evidence of Time