[Related to the Chapter Opener on page 436] According to an article in the Wall Street Journal, KB Homes and
other builders found demand for new homes increasing
in 2017 as a result of an increase in the formation of new
households. In the long run, formation of new households depends on population growth. Are firms like
homebuilders that sell products whose demand depends
partly on demographic factors likely to be more or less
affected by the business cycle than are other firms whose
products are less dependent on these factors (holding constant other factors that affect the demand for new homes)?
Briefly explain.
Source: Laura Kusisto and Sarah Chaney, “U.S. Housing Starts
Fell in April for Third Time in Four Months,” Wall Street Journal,
May 16, 2017.