Applying neoclassical theory to the housing market,________ cause a decrease in the desired stock of houses.
A)higher expected household incomes
B)higher rates of household formation
C)increases in the expected relative price of housing
D)tighter constraints on mortgage financing

Question

Quizplus · Accepted Answer

Tighter constraints on mortgage financing make it more difficult for individuals to obtain loans to purchase homes, leading to a decrease in the desired stock of houses as fewer people can afford to buy.

Applying Neoclassical Theory to the Housing Market,________ Cause a Decrease