Strong economic growth tends to reduce the probability that the issuer of a mortgage will default on its debt payments and therefore tends to decrease mortgage prices.

Name: Strong economic growth tends to reduce the probability that the issuer of a mortgage will default on its debt payments and therefore tends to decrease mortgage prices.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Strong economic growth reduces the probability of default, which decreases risk and increases demand for mortgages, thus increasing mortgage prices.

Strong Economic Growth Tends to Reduce the Probability That the Issuer