Which of the following is NOT a reason for the Bank of Canada and the government to keep a close watch on the housing market?
A) the potential effect on consumption spending caused by large decreases in housing prices
B) the financial consequences to mortgage holders if interest rates rise
C) the financial consequences to mortgage holders if house prices suddenly drop
D) the financial consequences to mortgage holders if house prices suddenly rise

Question

Quizplus · Accepted Answer

The financial consequences to mortgage holders if house prices suddenly rise are generally positive as they see an increase in the value of their assets. Therefore, this is not a reason for the Bank of Canada and the government to closely monitor the housing market.

Which of the Following Is NOT a Reason for the Bank