The demand for housing is brought into equilibrium with the existing stock of housing by changes in the:
A)real interest rate. nominal
B)interest rate. relative
C)price of housing. overall
D)price level.

Question

Quizplus · Accepted Answer

Changes in the price of housing will affect demand for housing, as higher prices will decrease demand and lower prices will increase demand. When the price of housing is in equilibrium with the existing stock of housing, there is neither excess demand nor excess supply. Changes in real interest rates, nominal interest rates, and the price level may affect demand for housing, but they do not directly bring supply and demand into equilibrium.

The Demand for Housing Is Brought into Equilibrium with the Existing