What Happens Over Time to the Real Cost of Purchasing

question 53

Multiple Choice

What happens over time to the real cost of purchasing a home if the mortgage payments are fixed in nominal terms and inflation is in existence?

• A) The real cost is constant.
• B) The real cost is increasing.
• C) The real cost is decreasing.
• D) The price index must be known to answer this question.

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Definitions:

Fallacy

A mistaken belief, especially one based on unsound argument or reasoning that appears logical but is actually flawed.

Catholic Church

The largest Christian church, led by the Pope, characterized by its long tradition and teachings that include the sacraments and doctrines of apostolic succession.

True Conclusion

An inference or result that logically follows from the premises and is consistent with established facts.

Fallacy

A mistaken belief or error in reasoning that renders an argument logically invalid, often due to a misunderstanding or misapplication of principals.