The Model of Supply and Demand Leads to the Prediction

question 106

Multiple Choice

The model of supply and demand leads to the prediction that low interest rates cause:

• A) an increase in housing prices, especially in cities with plenty of room for expansion.
• B) an increase in housing prices, especially in cities with limited land.
• C) a decrease in housing prices, especially in cities with plenty of room for expansion.
• D) a decrease in housing prices, especially in cities with limited land.

---

Definitions:

Interest Rate

The amount charged by a lender to a borrower for the use of assets, usually expressed as a percentage of the principal.

Education Expenses

Costs associated with education, including tuition, books, and supplies, among others.

Interest Rate

The cost of borrowing money or the return on investment for savings and loans, usually expressed as a percentage.

Income Loss

Refers to a decrease in earnings or revenue, often due to unexpected events, market changes, or operational failures.