If an Increase in the Mortgage Rate Causes a Decline

question 107

True/False

If an increase in the mortgage rate causes a decline in new home purchases, the consumption share of GDP will fall.

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Definitions:

Contributions

Money that is given or paid into a fund or a plan, often used in contexts of pensions, insurance, and investments.

Investments

The act of committing money or capital to an endeavor with the expectation of obtaining an additional income or profit.

Compounded Semi-annually

A method of calculating interest where the interest is added to the principal sum twice a year, resulting in interest on interest.

Semi-annual Payments

Payments that are made twice a year as a means to fulfill a financial obligation.