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12 Mar 2026, 19:00
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A
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
65%
(hard)
Question Stats:
54% (02:00) correct
46%
(02:17)
wrong
based on 131
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Following a banking crash in the country of Econa, the country has faced a recession that has included a contraction of the real estate sector, wherein sales are down by about twelve percent compared to two years ago when the recession began. Real estate firms have found, however, that the proportion of mortgage holders who paid their monthly installments on time fell sharply in the first year of the recession, but the following year it stabilized at its pre-recession level.
Which of the following, if true, most helps to explain the change between the first two years of the recession in the proportion of mortgage holders who paid their monthly installments on time?
A. Of the numerous Econan homeowners facing financial difficulties prior to the recession, almost all defaulted on their mortgages in the first year, surrendering their homes to the lenders.
B. Econan homeowners saw many of their costs, utilities, and taxes in particular, increase between the recession’s first and second years.
C. The total number of mortgage holders increased between the recession’s first and second years.
D. Real estate firms in Econa tried to bolster sales during the recession’s second year by arranging for low-interest mortgages.
E. Those segments of the real estate market that are relatively immune to the effects of a recession, such as the sale of real estate for public works, suffered no drop in sales during the recession’s first year.
Which of the following, if true, most helps to explain the change between the first two years of the recession in the proportion of mortgage holders who paid their monthly installments on time?
A. Of the numerous Econan homeowners facing financial difficulties prior to the recession, almost all defaulted on their mortgages in the first year, surrendering their homes to the lenders.
B. Econan homeowners saw many of their costs, utilities, and taxes in particular, increase between the recession’s first and second years.
C. The total number of mortgage holders increased between the recession’s first and second years.
D. Real estate firms in Econa tried to bolster sales during the recession’s second year by arranging for low-interest mortgages.
E. Those segments of the real estate market that are relatively immune to the effects of a recession, such as the sale of real estate for public works, suffered no drop in sales during the recession’s first year.
15 Mar 2026, 09:45
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Video explanation:
17 Mar 2026, 00:08
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Answer: A
In the first year, many financially struggling homeowners defaulted and exited the pool of mortgage holders. That means by the second year, the remaining mortgage holders were more financially stable, so the proportion paying on time returned to normal.
Why not others:
B: Higher costs → should worsen payments, not stabilize.
C: More mortgage holders doesn’t explain improved payment reliability.
D: New low-interest mortgages don’t explain why existing payment rates recovered.
E: Irrelevant to mortgage payment behavior.
In the first year, many financially struggling homeowners defaulted and exited the pool of mortgage holders. That means by the second year, the remaining mortgage holders were more financially stable, so the proportion paying on time returned to normal.
Why not others:
B: Higher costs → should worsen payments, not stabilize.
C: More mortgage holders doesn’t explain improved payment reliability.
D: New low-interest mortgages don’t explain why existing payment rates recovered.
E: Irrelevant to mortgage payment behavior.
