If an Increase in the Mortgage Rate Causes a Decline

question 107

True/False

If an increase in the mortgage rate causes a decline in new home purchases, the consumption share of GDP will fall.

---

Definitions:

Cash Budgeting

The process of estimating future cash inflows and outflows to determine the cash position and to plan for any surplus or deficit.

Financial Statements

Written records that convey the business activities and the financial performance of a company.

GAAP

Generally Accepted Accounting Principles, which are a set of rules and standards used in the United States for financial reporting.

Accounts Payable

Liabilities of a business that are owed to creditors for goods and services purchased on credit.