During the expansion phase of the business cycle,households become optimistic about their future earning capacity as do banks.Nominal interest rates rise during expansions.Mortgage lending could be expected to
A)rise if the change in future earnings is thought to be greater than the change in interest rates.
B)stay the same.
C)fall.
D)fall if the change in future earnings is thought to be greater than the change in interest rates.

Question

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The Answer of During the expansion phase of the business cycle,households become optimistic about their future earning capacity as do banks.Nominal interest rates rise during expansions.Mortgage lending could be expected to
A)rise if the change in future earnings is thought to be greater than the change in interest rates.
B)stay the same.
C)fall.
D)fall if the change in future earnings is thought to be greater than the change in interest rates.

During the Expansion Phase of the Business Cycle,households Become Optimistic