1. Write a minimum of 200 words or at least 10 sentences, showcasing your original thoughts and ideas without resorting to copy-pasting from external sources.
2. Provide a context for your writing, demonstrating how the economic principles we've discussed in class relate to the real world.
3. Incorporate at least one relevant reference to support your arguments and assertions.

It is crucial that your writing is coherent and free from grammatical errors.

To illustrate the expectations, I've provided a sample below:

Sample Task: Housing Market Equilibrium

As we delve into the world of supply and demand, let's take a closer look at how these principles are shaping the current state of the housing market. The COVID-19 pandemic has brought in a pandemic-induced recession. General expectation was house prices were going to fall due to lower demand stemming from the rising unemployment rate and financial burden. Yet, the housing market seems to be defying expectations. Houses are selling like hotcakes, and prices continue to climb, leaving many wondering why this is happening. What specific demand or supply factors are at play here?

The COVID-19 pandemic brought about significant changes in people's preferences for housing. First, demand for larger homes increased as people started spending more time at home. People demanded homes with amenities such as more rooms, indoor gyms, and outdoor spaces that offer enjoyable home stays and privacy for the home office. Second, working from home opportunities reduced the need to live close to work and increased demand for houses further away from major urban cities. The demand for houses in suburban and rural areas increased as they offered more space for a lower cost. The sudden rise in demand for houses in those suburban and rural areas may lead to increased competition and higher home prices.

During the pandemic, the Federal Reserve implemented several stimulus measures such as lower interest rates to encourage borrowing and spending to combat the pandemic-induced recession. Lower interest rates may have significantly affected the housing market by making home buying more affordable. The lower mortgage rate may lead to higher demand for housing and cause home prices to climb up.

From the Supply side of the housing market, higher demand is met with increased construction. However, social distancing requirements and pandemic-induced disruption of the inventory supply chains significantly limited new constructions. A lower supply of new houses could also play an important role in rising housing prices.

Reference:

https://www.dallasfed.org/research/economics/2021/1228Links to an external site.

https://www.fastexpert.com/blog/housing-market-after-covid/Links to an external site.