Answered step by step
Verified Expert Solution
Question
1 Approved Answer
In 2019, an article in the Wall Street Journal on the housing market stated, The home-building sector has struggled with higher interest rates. Source: Harriet
In 2019, an article in the Wall Street Journal on the housing market stated, "The home-building sector has struggled with higher interest rates." Source: Harriet Torry, "U.S. Housing Starts Jumped in January," Wall Street Journal, March 8, 2019. a. Why do high interest rates decrease the quantity of homes that households demand? A. The higher the interest rate, the higher the price that sellers are willing to accept for their home. B. When interest rates are high, the supply of housing decreases. C. Higher interest rates induce consumers to spend more money save less for future home purchases. D. The higher the interest rate, the more expensive it is for households to borrow money. b. In which component of aggregate expenditure does the Bureau of Economic Analysis include purchases of new houses? A. Consumption. B. Government purchases. C. Investment. D. Net exports
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started