You Notice That When Interest Rates Increases, New Residential Housing

question 121

Multiple Choice

You notice that when interest rates increases, new residential housing prices tend to decrease. This observation indicates that

• A) a scatter diagram between interest rates and housing prices will show a negative relationship.
• B) higher interest rates must cause low housing prices.
• C) a scatter diagram between interest rates and housing prices will show a direct relationship.
• D) there must be false causality between interest rates and housing prices.

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Definitions:

Health Care Services

Services provided to individuals or communities to promote, maintain, monitor, or restore health.

Alternative Goods

Products or services that can be used in place of each other; satisfying the same need or want, essentially serving as substitutes.

Elasticity Of Demand

An assessment showing the influence of price adjustments on the quantity demanded of a product.

Price Increase

A rise in the cost of goods or services, often measured as a percentage of the previous price.