One of the most fundamental principles of real estate economics is the recognition that:
(a) supply of land is fixed
(b) increase in density is always possible
(c) land use is never fixed
(d) zoning can be easily changed
Adequate financing depends on two main variables:
(a) market potential and condition of the money market
(b) marketability and profit
(c) profit and attitude of developer
(d) market potential and profit
Asking Price divided by Gross Schedule Income equals:
(a) gross rent multiplier
(b) capitalization rate
(c) tax savings
(d) cash on cash
Anti-regulators believe the market is more efficient at allocating resources than
government politicians:
(a) true
(b) false
The steps in analyzing both improved property and unimproved property include
estimating if financing is available, and the terms.
(a) true
(b) false
Competition of uses specifically influences:
(a) location of schools
(b) future street patterns
(c) price paid for a given land site
(d) location of city hall
When reviewing a proposal for a new rural land subdivision, government planners may
request an analysis of supply and demand factors. In doing so, the government planners
are concerned about:
(a) premature subdividing
(b) building codes
(c) conditions, covenants, and restrictions
(d) environmental issues
When a river is polluted due to a nearby land development project, economists label
this a:
(a) private cost
(b) social cost
(c) opportunity cost
(d) overhead cost
Real estate is defined as:
(a) land
(b) utilities
(c) lamp
(d) movable by law
After the Savings and Loan Crisis of the late 1980s, most real estate loans were sold on
the secondary market, and often bundled into securities, a process known as:
(a) reintermediation
(b) securitization
(c) disintermediation
(d) recapitalization
NIMBY stands for:
(a) neighborhood interested mass balance yield
(b) not in my best yield
(c) not in my back yard
(d) none of the above
Homeowners can deduct:
(a) principal on mortgage
(b) interest on mortgages
(c) minor home repairs
(d) shower repairs
Business real estate includes:
(a) commercial and industrial
(b) only commercial
(c) only industrial
(d) none of the above
Zoning is:
(a) a land use control
(b) division of land into districts
(c) a planning tool
(d) all of the above
A comparable rented studio condo unit just sold for $175,000 and had a gross scheduled
income of $25,000. The subject condo has a gross scheduled income of $24,000. Based
only on this information, the estimated market price for the subject condo is:
(a) $174,000
(b) $168,000
(c) $150,000
(d) $149,000
Real estate economics does not specifically address real estate values:
(a) true
(b) false
An expanded economic base:
(a) is not a basis for a healthy community
(b) is not required when the population increases
(c) is not needed for most communities
(d) helps a community survive
For a community to be an economic success without population change is not common
because of:
(a) advanced site planning
(b) regional births and immigrations are historically higher that the rate of death
(c) the rate of death is historically higher than births
(d) the death rate is equal to the birth rate
Densities in an area may increase without any construction of new buildings.
(a) true
(b) false
Discretionary income includes:
(a) income after paying taxes
(b) income after paying rent
(c) income after paying all necessities
(d) none of the above
A major step in land development and construction include:
(a) property management
(b) market distribution
(c) planning
(d) all are major steps
The major expense for local government is:
(a) employee retirement plans
(b) education
(c) public works
(d) natural defense
There are three types of money in the United States today. These include all of the
following EXCEPT:
(a) coins
(b) credit cards
(c) paper currency
(d) checking accounts
Highest and best use must:
(a) be legal
(b) produce the highest capitalized net income return to the land
(c) consider cost of production
(d) all of the above
If demand by renters for apartments increases, while the number of apartment units
available for rent increases by a proportional amount, apartment rents should:
(a) increase
(b) decrease
(c) remain the same
(d) become dynamic
With demand fixed which of the following is correct:
(a) equilibrium will not change
(b) an increase in supply should increase prices
(c) an increase in supply should lower prices
(d) none of the above
A city that grows from several points, such as major shopping centers, as well as from
the downtown central business district, is best described as what type of city growth
pattern?
(a) multi-nuclei
(b) sector
(c) concentric
(d) wedge
If the Federal Reserve wishes to reduce the money supply, it could:
(a) decrease the reserve requirements
(b) decrease the discount rate
(c) sell government bonds
(d) decrease the federal funds rate
Non-economic factors include:
(a) political forces
(b) social forces
(c) legal forces
(d) all of the above
The time period in a business cycle from the trough (bottom) to the peak is called:
(a) recession
(b) recovery
(c) prosperity
(d) expansion