Assume changes in regulation make it easier for households


Assume changes in regulation make it easier for households to get mortgages from banks. Seeing this, firms find it more profitable to build more houses, so residential investment increases. What effect do you think this might have on investment outside of residential investment and on the real interest rate? (Hint: treat investment as residential investment + other investment.)

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Business Economics: Assume changes in regulation make it easier for households
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