Economics · Investment Theory
Which of the following statements is not correct about residential investment?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The cost of owning a house rises proportionately with the real interest rate.
- 2The demand for housing is insensitive to the nominal interest rate.✓
- 3High nominal interest rates + high inflation encourage housing investment.
- 4It depends on the net real return from owning housing.
Correct answer
The demand for housing is insensitive to the nominal interest rate.
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