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.

---

Definitions:

Fulfilling Social Roles

The process of meeting the expected patterns of behavior associated with an individual's position in a social structure.

An Ideal

A concept or standard of perfection or excellence toward which efforts are directed as a goal to achieve.

A Community

A group of people living in the same place or having a particular characteristic in common, or the sense of fellowship that arises from sharing common attitudes, interests, or goals.

Empirically Derived

Based on observations or experiences rather than theory or pure logic. Data or conclusions are drawn from experiments or systematic observations.