According to the textbook, changes in the aggregate economy were shown to impact subprime mortgage default rates more severely than traditional mortgage default rates.

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During the financial crisis, it was observed that the aggregate economic downturn, characterized by factors such as rising unemployment and falling home prices, had a more pronounced effect on subprime mortgage default rates compared to traditional mortgage default rates. This is because subprime borrowers typically have weaker credit histories and financial conditions, making them more vulnerable to economic hardships.

According to the Textbook, Changes in the Aggregate Economy Were