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The Federal Reserve sharply increased interest rates from 1.25% to 5.25% from 2004- 2006. This caused: O Borrowers to increase their demand for loans. Lenders

The Federal Reserve sharply increased interest rates from 1.25% to 5.25% from 2004- 2006. This caused: O Borrowers to increase their demand for loans. Lenders to supply funds to subprime borrowers. An increase in the rate of default among subprime borrowers. O Lenders to lower the cost of borrowing

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