Which of the Following Statements About the Housing Market Is

question 22

Multiple Choice

Which of the following statements about the housing market is not true?

• A)The demand curve for housing is negatively sloped.
• B)Many experts believe that one of the factors contributing to the housing bust of 2006 was that interest rates had been too high since the year 2000.
• C)The quantity of housing demanded is negatively related to the rental price of housing.
• D)For many people, the house they live in is the largest capital item they rent or own.
• E)All of these are true.

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Definitions:

Industry Structures

The characteristics that define the competitive environment of a market, including the number and size of competitors, product differentiation, and ease of market entry.

Economic Profit

Total revenues minus explicit and implicit costs, representing the return on investment beyond the normal expected return.

Normal Profit

The level of profit that is necessary for a company to remain competitive in the market, often seen as the minimum acceptable return.

Allocative Inefficiency

A situation where resources are not allocated optimally, leading to a loss of economic efficiency.