When We Look at Inflation-Adjusted Home Prices in the U

question 45

Multiple Choice

When we look at inflation-adjusted home prices in the U.S.from 1910-2010, we see that

• A)in real terms homes were more expensive in the 1930s than in the 1990s
• B)the sharpest increase in home prices occurred right after World War II
• C)the sharpest increase in home prices occurred from the late 1990s to about 2006
• D)from 2000-2006, nominal housing prices increased sharply but real housing prices decreased slightly
• E)none of the above

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Definitions:

Fair Value

The estimated market price of an asset or liability, reflecting the amount for which it could be exchanged or settled between knowledgeable, willing parties in an arm's length transaction.

Trading Securities

Financial securities purchased by a company, not intended for long-term investment but rather for making a profit in the near term from their sale or trade.

Unrealized Holding Loss

A decrease in the value of an investment that has not yet been sold for cash.

Income Statement

A financial report that shows a company's revenues, expenses, and net income over a specific period.