Suppose That Consumers Begin to Believe That the Price of Housing

question 72

Multiple Choice

Suppose that consumers begin to believe that the price of housing will be lower next period. What will happen in the market for housing as a result of these expectations?

• A) Nothing will happen yet. Consumers will wait for the price to actually decrease before changing their behavior.
• B) Demand for housing will increase, causing the price of housing to increase rather than fall.
• C) Demand for housing will begin to fall, and the price of housing will decrease.
• D) Demand for housing will begin to rise as investors believe they are getting a "deal."

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Definitions:

Machine Breakdowns

Unplanned failures or malfunctions of machinery, often disrupting production processes and requiring repair or replacement.

Direct Materials Quantity Variance

The cost associated with the difference between the actual quantity and the standard quantity of direct materials used in producing a commodity multiplied by the standard direct materials price.

Direct Materials

Raw materials that are directly traceable to the manufacturing of a product and constitute a significant portion of the product's cost.

Direct Materials Quantity Variance

A measure of the difference between the actual quantity of materials used in production and the expected amount, indicating efficiency in material usage.