Patrick just landed a job working for an up and coming online gaming company in Palo Alto, California. In a lot of ways, this is his dream job come true-the chance to work for a company that makes gaming software and live in California at the same time. As his plane lands at San Jose International, he pictures a snazzy apartment with a palm tree right outside the front door. A few hours later, as he meets a property manager of a large apartment complex, his heart sinks. The price of apartments is outrageous! Back at the hotel, he checks the Bureau of Labor Statistics site to try to get a better picture of why the cost of housing is so high in this region of the country. Which factors may be causing the rise in the price of housing?
A) A low unemployment rate and increasing GDP
B) A high consumer's marginal index and low PPI
C) A low CPI and high state tax rate
D) A decreasing Disruptive Technologies Index and high unemployment

Question

Quizplus · Accepted Answer

An increase in gross domestic product (GDP) signifies a higher demand for goods and services. When firms are producing, they usually have a need for more workers. If more workers move into the area, the demand for additional housing becomes greater. This will often result in a housing shortage because workers desire to live close to where they work. These circumstances will increase the price of available housing.

Patrick Just Landed a Job Working for an Up and Coming