Question: What is the collateral effect on household spending? Question 3 options: Using collateral to reduce interest rate charged. Home equity used as collateral reduces homeowners'

What is the "collateral effect" on household spending? Question 3 options: Using collateral to reduce interest rate charged. Home equity used as collateral reduces homeowners' liquidity. Potential home buyers have to reduce spending in order to save for their down payments as collateral. Homeowners find it easier to borrow using their home value as security as home values rise

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