PRINCIPLES OF MACROECONOMICS (LL)W/ACC.
7th Edition
ISBN: 9781264088980
Author: Frank
Publisher: MCG
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Chapter 17, Problem 5RQ
To determine
Describe the easing
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The success of your business due to the strong economy explains why my spouse feels excited. The increase in interest rates may lead to a decline in new home demand. When mortgage rates rise they lead to higher costs which can discourage potential buyers and reduce demand in the housing market. The government increases interest rates as a measure to suppress inflation and stop the economy from growing too fast.
Business expansion during this period presents significant risks. Before making significant investments it would be prudent to monitor how the market responds to the rate increase. Business expansion during a decline in demand for new homes could create financial difficulties.
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PRINCIPLES OF MACROECONOMICS (LL)W/ACC.
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