Find all School-related info fast with the new School-Specific MBA Forum

It is currently 20 Oct 2014, 13:17

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

In January there was a large drop in the number of new

  Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:
Director
Director
avatar
Joined: 15 Aug 2005
Posts: 804
Location: Singapore
Followers: 2

Kudos [?]: 6 [0], given: 0

In January there was a large drop in the number of new [#permalink] New post 18 Sep 2005, 16:48
00:00
A
B
C
D
E

Difficulty:

(N/A)

Question Stats:

0% (00:00) correct 0% (00:00) wrong based on 0 sessions
In January there was a large drop in the number of new houses sold, because interest rates for mortgages were falling and many consumers were waiting to see how low the rates would go. This large sales drop was accompanied by a sharp rise in the average price of new houses sold.

Which of the following, if true, best explains the sharp rise in the average price of new houses?

(A) Sales of higher-priced houses were unaffected by the sales drop because their purchasers have fewer constraints limiting the total amount they pay.
(B) Labor agreements of builders with construction unions are not due to expire until the next January.
(C) The prices of new houses have been rising slowly over the past three years because there is an increasing shortage of housing.
(D) There was a greater amount of moderate-priced housing available for resale by owners during January than in the preceding three months.
(E) Interest rates for home mortgages are expected to rise sharply later in the year if predictions of increased business activity in general prove to be accurate.
_________________

Cheers, Rahul.

Manager
Manager
avatar
Joined: 07 Oct 2004
Posts: 99
Followers: 1

Kudos [?]: 8 [0], given: 0

 [#permalink] New post 18 Sep 2005, 17:34
A) Sales of higher-priced houses were unaffected by the sales drop because their purchasers have fewer constraints limiting the total amount they pay.

Sales of high priced homes now comprise a greater percentage of a shrinking total sales figure, hence average price increases.
Senior Manager
Senior Manager
avatar
Joined: 16 Jul 2005
Posts: 408
Location: Las Vegas
Followers: 1

Kudos [?]: 8 [0], given: 0

 [#permalink] New post 18 Sep 2005, 19:36
A because the higher price homes are for those who are not worried about saving money. Therefore, it would not affect those who would want to purchase a higher price home regardless of the decrease in mortgage rates.
Senior Manager
Senior Manager
avatar
Joined: 27 Aug 2005
Posts: 332
Location: Montreal, Canada
Followers: 2

Kudos [?]: 18 [0], given: 0

 [#permalink] New post 18 Sep 2005, 19:41
A because people who can afford a slightly higher interest rate will purchase the house anyway, rather than timing the market to the second.
Director
Director
avatar
Joined: 15 Aug 2005
Posts: 804
Location: Singapore
Followers: 2

Kudos [?]: 6 [0], given: 0

 [#permalink] New post 18 Sep 2005, 20:05
I see it! Thanks guys! OA is A indeed!
_________________

Cheers, Rahul.

  [#permalink] 18 Sep 2005, 20:05
    Similar topics Author Replies Last post
Similar
Topics:
In January there was a large drop in the number of new EnterMatrix 2 23 Jul 2010, 11:23
6 Experts publish their posts in the topic In January there was a large drop in the number of new SudiptoGmat 33 19 Jan 2010, 08:36
In January there was a large drop in the number of new tarek99 6 24 Dec 2007, 02:25
In January there was a large drop in the number of new ak_idc 7 23 Nov 2006, 07:58
In January there was a large drop in the number of new nakib77 3 17 Dec 2005, 11:39
Display posts from previous: Sort by

In January there was a large drop in the number of new

  Question banks Downloads My Bookmarks Reviews Important topics  


GMAT Club MBA Forum Home| About| Privacy Policy| Terms and Conditions| GMAT Club Rules| Contact| Sitemap

Powered by phpBB © phpBB Group and phpBB SEO

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.