Question 3: The Fourquadrant Model. Former Prime Minister Goh Chok Tong depicted the vision of

turning Singapore into a global city in his 2001 National Day Rally speech. The economy and society of

Singapore have evolved rapidly. A notable change was accepting more new immigrants. Between 2004

and 2010, Singapore's population rapidly grew. The country needed to prepare for the larger

population, and government policy needed adjustment. One significant change was the introduction

of the Reserve List System (RLS) of Government Land Sales in 2001

(a) Consider the Fourquadrant model. Assume the yield and depreciation rate are exogenous

parameters. If the land policy remained at the status quo of 2001, how would a substantially

larger population impact the longterm equilibrium of the rent, housing price, and housing

stock? Provide your reasoning.