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.
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.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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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
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