Assertion (A): Lowering the margin requirement on loans for buying houses encourages housing loans.
Reason (R): A lower margin lets a buyer borrow a larger share of the house's value.

Both A and R are true, and R is the correct explanation of A.Correct answerYour answerBoth A and R are true, but R is not the correct explanation of A.Correct answerYour answerA is true, but R is false.Correct answerYour answerA is false, but R is true.Correct answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer A

Correct answer: A

Borrowers need less of their own money, so more of them can buy. R explains A.

Concept: Margins and housing loans
Typical timeTypical: 70 s
Your timeYours: —

The rule this testsMargin requirements and moral suasion

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Assertion (A): Lowering the margin requirement on loans for buying houses encourages housing loans.Reason (R): A lower margin lets a buyer borrow a larger share of the house's value.

Explanation

Assertion (A): Lowering the margin requirement on loans for buying houses encourages housing loans.
Reason (R): A lower margin lets a buyer borrow a larger share of the house's value.