Economics, 3rd Edition

PROBLEMS AND APPLICATIONS

1 

Explain how deregulation of the financial system may 

have affected the following:

a. a newly married couple aged 24 who have just 

secured their first jobs and want to buy a house

b.  joint homeowners with a house valued at 

€350,000 

with a mortgage of 

€200,000 who want to celebrate 

their 25th wedding anniversary with a world cruise 

and who are looking to borrow money to do so

c.  the market for newly constructed properties. 

2 

In the face of a financial crisis such as that created 

by the dot.com collapse and the 9/11 terrorist attacks 

in the United States, why would a central bank have 

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