This assignment analyzes an article on shared responsibility mortgages, focusing on the economic concepts of externalities, debt contracts, and securitization. The student's responses address how debt contracts can create negative externalities, particularly in the housing market, and how shared responsibility mortgages can mitigate these risks. The assignment also explores the role of government in securitization and how tying mortgages to house prices could help prevent unsustainable economic bubbles. The student demonstrates an understanding of these concepts by explaining the authors' statements and providing relevant examples and references to support their arguments. The responses highlight the impact of housing prices on borrowing decisions and the broader economy, advocating for policies that promote more stable and responsible mortgage practices.
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