If Interest Rates Rise, Then Home Sales Will Decline

question 188

Multiple Choice

If interest rates rise, then home sales will decline. Thus, if interest rates rise, then real estate prices will drop, because if home sales decline, then real estate prices will drop.

• A) Deductive, invalid.
• B) Inductive, cogent.
• C) Deductive, valid.
• D) Inductive, weak.
• E) Inductive, strong.

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Definitions:

Equal Payments

Fixed payments made consistently over the duration of a loan or mortgage agreement.

Loan Date

The date on which a loan agreement is executed and from which interest starts accruing.

Final Payment

The last payment made to settle the balance of a financial obligation.

Interest Rate

The rate at which borrowers are charged interest for the use of funds they have loaned from a lender.