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Following the global financial crisis, mortgage rates reached record low levels in 2011. a. What effect should this have, according to the household liquidity effect

Following the global financial crisis, mortgage rates reached record low levels in 2011.

a. What effect should this have, according to the household liquidity effect channel

b. During the same time, most banks raised their credit standards significantly,

making it much more difficult to qualify for home loans and refinance existing

mortgages. How does this affect the answer to (a)?

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