Macroeconomics
Macroeconomics
13th Edition
ISBN: 9781337617444
Author: Roger A. Arnold
Publisher: Cengage
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Chapter 5, Problem 1QP
To determine

Lower lending standards and higher housing prices.

Expert Solution & Answer
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Explanation of Solution

When the lending rates are low and the interest rates are also lower it implies that loans or mortgages are easier to access at a cheaper cost. This will lead to an increase in the demand for housing as the housing financing can be easily availed. This increase in demand would result in a higher price for housing as housing is a limited resource.

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