The Relationship Between Interest Rates as a Percent (X) and Housing

question 118

Multiple Choice

The relationship between interest rates as a percent (X) and housing starts (Y) is given by the linear equation Y' = 4094 - 269X. At what interest rate will there be no permits for housing starts?

• A) 8.26%
• B) 15.22%
• C) 14.32%
• D) 16.61%

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Definitions:

Tax

A compulsory financial charge imposed by a government on individuals or entities to fund government spending and public expenditures.

Consumer Surplus

The offset between the potential total payment by consumers for a good or service and the actual amount remitted.

Tax Revenue

The fiscal earnings that are accumulated by governments through taxation.

Producer Surplus

The difference between what producers are willing to sell a good for and the actual price they receive, representing profit or gains from trade.