SOLVED

1) The stock of residential housing is essentially fixed since ________. A) few individuals are building homes in the wake of the financial crisis. B) residential housing takes time to build and wears out slowly. C) is independent of domestic interest rates. D) is independent of the value of U.S. exports and imports. 2) In the housing market, the relative price of housing is analogous to ________. A) implicit rent B) Tobin’s q C) inventory investment D) the user cost of capital 3) Tobin’s q theory provides an explanation for ________. A) housing demand B) housing supply C) subprime mortgages D) residential investment 4) Applying neoclassical theory to the housing market, an upward shift of the expected marginal product of (housing) capital may be caused by ________. A) higher expected household income B) the inability to buy as much housing at a higher price C) an expected increase in the relative price of housing D) a decrease in the cost of building new houses 5) Applying neoclassical theory to the housing market, the idea that “housing is a good investment” refers to ________. A) higher expected household income B) the inability to buy as much housing at a higher price C) an expected increase in the relative price of housing D) a decrease in the cost of building new houses 6) Applying neoclassical theory to the housing market, the downward slope of the demand curve for housing reflects ________. A) higher expected household income B) the inability to buy as much housing at a higher price C) an expected increase in the relative price of housing D) a decrease in the cost of building new houses 7) Applying neoclassical theory to the housing market, ________ causes a downward shift of the residential investment curve. A) higher expected household income B) the inability to buy as much housing at a higher price C) an expected increase in the relative price of housing D) a decrease in the cost of building new houses 8) Applying neoclassical theory to the housing market, ________ causes a decrease in the user cost of housing. A) higher expected household income B) the inability to buy as much housing at a higher price C) an expected increase in the relative price of housing D) a decrease in the cost of building new houses 9) The relative price of housing is equal to ________. A) the general price level divided by the rate of inflation. B) the rate of inflation divided by the nominal price of a house. C) the nominal price of housing divided by the general price level. D) the general price level divided by the nominal price of housing. 10) In price and quantity space, the supply curve for housing is ________. A) upward-sloping. B) downward-sloping. C) horizontal. D) vertical.