ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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It has been suggested that homeowners be allowed to deduct part of their mortgage (loan to buy a home) interest payments on their income tax forms. If such a policy were to be adopted, what effect would it have on the demand for houses? Explain your answer with the use of a graph. Show the effect on the price of houses, assuming that the supply of houses is very inelastic in the short run.
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