The federal government (1) encouraged the development of the savings and loanindustry, (2) virtually forced the S&L industry to make long-term, fixed-interest-rate mortgages, and (3) forced S&Ls to obtain most of their capital asdeposits that are withdrawable on demand. a.Would the S&Ls be better off if rates are expected to increase or to decreasein the future? b.Would the S&L industry be better off if the individual institutions sold theirmortgages  to  federal  agencies  and  then  collected  servicing  fees  or  if  theinstitutions held the mortgages that they originated?

Macroeconomics: Private and Public Choice (MindTap Course List)
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Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
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ChapterST5: The Great Recession Of 2008-2009: Causes And Response
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4-4The federal government (1) encouraged the development of the savings and loanindustry, (2) virtually forced the S&L industry to make long-term, fixed-interest-rate mortgages, and (3) forced S&Ls to obtain most of their capital asdeposits that are withdrawable on demand.

a.Would the S&Ls be better off if rates are expected to increase or to decreasein the future?

b.Would the S&L industry be better off if the individual institutions sold theirmortgages  to  federal  agencies  and  then  collected  servicing  fees  or  if  theinstitutions held the mortgages that they originated?

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