The housing boom that took place during the first half of the 2000s best illustrates how

Question

Quizplus · Accepted Answer

The housing boom was primarily fueled by investment spending by households, in the form of buying homes. This indicates that investment spending by households is sensitive to changes in the real rate of interest. As interest rates decreased, it became easier and more affordable for households to take out loans to purchase homes, which increased demand and led to a housing boom.

The Housing Boom That Took Place During the First Half