Question

In: Economics

Suppose home owners owe $10 trillion in mortgage loans. Instructions: Enter your responses as a whole...

Suppose home owners owe $10 trillion in mortgage loans.

Instructions: Enter your responses as a whole number. In part b, do not include a negative sign (-) with your answer.

a. If the mortgage interest rate is 5 percent, approximately how much are home owners paying in annual mortgage interest?

$ billion

b. If the interest rate drops to 2 percent, by how much will annual interest payments decline?

$ billion

c. How will this change in the interest rate impact aggregate demand?

Aggregate demand will (Click to select) not change increase decrease .

Expert Solution

Solution:-

(a) Calculate the amount that home owners pay in annual mortgage interest -

Annual mortgage interest amount = 5% * 10 trillion

= 0.05 * 7 trillion

= 500 billion

(b) Calculate the amount that home owners pay in annual mortgage interest -

Annual mortgage interest amount declines = 2% * 10 trillion

= 0.03 * 7 trillion

= $200 billion

c) Aggregate demand will increase

Rahul Sunny answered 6 months ago

Suppose Canadian home-owners owe an average of $198,000 on their mortgages. Assume that mortgage debt is...

Suppose Canadian home-owners owe an average of $198,000 on their mortgages. Assume that mortgage debt is normally distributed in Canada with a standard deviation of $95,000. Standard Normal Distribution Table a. Albertans are reported to owe $243,900 in mortgage debt, much higher than the Canadian average. What is the probability of randomly selecting a Canadian with mortgage debt that exceeds $243,900? Round to four decimal places if necessary b. What is the probability of randomly selecting a Canadian with mortgage...

Suppose Canadian home-owners owe an average of $188,000 on their mortgages. Assume that mortgage debt is...

Suppose Canadian home-owners owe an average of $188,000 on their mortgages. Assume that mortgage debt is normally distributed in Canada with a standard deviation of $100,000. Standard Normal Distribution Table a. Albertans are reported to owe $242,000 in mortgage debt, much higher than the Canadian average. What is the probability of randomly selecting a Canadian with mortgage debt that exceeds $242,000? Round to four decimal places if necessary b. What is the probability of randomly selecting a Canadian with mortgage...

. The mean monthly mortgage paid by all home owners in a town is $2365 with...

. The mean monthly mortgage paid by all home owners in a town is $2365 with a standard deviation of $340. Use Chebyshev’s Theorem to find the following quantities. (a) (2 points) The minimum percentage of all home owners in this town who pay a monthly mortgage of $1685 to $3045. (b) (3 points) The interval that contains the monthly mortgage pay- ments of at least %84 of all home owners in this town.

Using your mortgage schedule spreadsheet, enter the following data: Cost of Home: $225,000 Down Payment: $15,000...

Using your mortgage schedule spreadsheet, enter the following data: Cost of Home: $225,000 Down Payment: $15,000 Annual Interest Rate: 6.960% Number of Years: 25 In addition, enter $400 as an additional principal payment for month 36 and $100 as an additional principal payment for month 75. Copy the monthly closing balance from month 52 into this question's response box AFTER you ensure that it is formatted using accounting formatting and 2 decimal places.

Assume that you are 10 years into a 30 year home loan at 5%. You owe...

Assume that you are 10 years into a 30 year home loan at 5%. You owe $200,000 left on your home at this time. You can refinance your loan at 4% for 20 years; however the TOTAL closing costs will be around $3,000. If you go for refinancing, how many more months would you need to live in the home in order to get the closing cost back? Ignore time value of money and tax credits of the interest payments...

Suppose the home firm is considering whether to enter the foreign market. Assume that the home...

Suppose the home firm is considering whether to enter the foreign market. Assume that the home firm has the following costs and demand: Fixed costs = $400 Marginal costs = $13 per unit Local price = $25 Local quantity = 20 Export price = $26 Export quantity = 20 a. What is the firm’s average cost from selling only in the local market? b. Calculate the firm’s profit from selling (i) just to Home’s market; (ii) to both markets. c....

A bank loan officer claims that the mean monthly mortgage payment made by all home owners...

A bank loan officer claims that the mean monthly mortgage payment made by all home owners in a certain city is $1365. A housing magazine wanted to test this claim. A random sample of 40 homeowners taken by this magazine produced the mean monthly mortgage of $1489 with a standard deviation of $278. Testing at the 2% significance level, would you conclude that the mean monthly mortgage payment made by all homeowners in this city is different from $1365? ...

Instructions: Write your responses to the following 5 questions for at least 5 of the 7...

Instructions: Write your responses to the following 5 questions for at least 5 of the 7 example news stories about correlational studies: Identify X and describe how it is being measured Identify Y and describe how it is being measured State the direction of the correlation (+ or –) Identify a possible Z (third) variable Fully interpret the relationship between X and Y (in plain English) Example 5: Internet use in class leads to lower test scores New research provides...

6-Assume that you are 10 years into a 30 year home loan at 5%. You owe...

6-Assume that you are 10 years into a 30 year home loan at 5%. You owe $200,000 left on your home at this time. You can refinance your loan at 4% for 20 years; however the TOTAL closing costs will be around $3,000. If you go for refinancing, how many more months would you need to live in the home in order to get the closing cost back? Ignore time value of money and tax credits of the interest payments...

(a) Fill in the missing blanks on the following ANOVA table. (Enter your answers as whole...

(a) Fill in the missing blanks on the following ANOVA table. (Enter your answers as whole numbers except for the test statistic value. Round the test statistic value to three decimal places.) ANOVA Source DF SS MS F-Statistic Regression 2 8 Error (Residual) 180 Total 92 (b) How many explanatory variables were in this model? (Enter your answer as a whole number.) (c) What was the sample size of the data set this model was built upon? (Enter your answer...