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. If the mortgage rate is 2% and the expected rate of increase in housing prices is 1%, should people getting a mortgage loan expect
. If the mortgage rate is 2% and the expected rate of increase in housing prices is 1%, should people getting a mortgage loan expect a positive or negative overall return? (10%) . Suppose the mortgage rate increases from 2% to 4% and the expected rate of increase in housing prices changes from 1% to 5%. Are people more or less likely to buy houses? Why? (10%)
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