Dan and Susan Greene are purchasing their first home in Savannah, Georgia. They are seeking pre-qualification on a home loan. The unemployment rate for Georgia is 10.2% and GDP is declining. Chances are pretty good that the Fed will raise interest rates in order to loosen the supply of money, resulting in a more expensive loan for Dan and Susan.

Question

Quizplus · Accepted Answer

A 10.2% unemployment rate, as well as declining GDP, are good indications that the economy is in a recession, and/or downward business cycle. In a recessionary climate, the Fed is likely to lower interest rates to induce spending. Dan and Susan may be able to qualify for a lower interest rate.

Dan and Susan Greene Are Purchasing Their First Home in Savannah