One Reason Advanced to Explain Why Housing Is a Leading

question 43

Multiple Choice

One reason advanced to explain why housing is a leading indicator is that

• A) the demand for housing depends on real GDP and declines in real GDP always precede the onset of recession.
• B) the demand for housing depends on the real interest rate and real interest rates generally climb as economies begin to turn down into recession.
• C) the demand for housing depends at least indirectly on the prices of construction materials and those prices always accelerate during the inflationary booms that precede recessions.
• D) the demand for housing depends critically on nominal GDP, which always falls during the inflation that precedes recession.
• E) none of the above.

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Definitions:

Pollution Reduction

Efforts or strategies aimed at decreasing the amount of pollutants released into the environment.

Government Caps

Limits set by the government on the amount of a commodity or service that can be produced, sold, or used.

Pollution Permits

Licenses issued by governments that allow the holder to emit a certain amount of pollutants over a given time period.

Property Rights

Legal rights to use, control, and derive benefits from a resource or property, including the right to exclude others.