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A specific policy is described below, based on measures that have been introduced or proposed in the UK, in response to a chronic shortage of affordable houses in many regions.
Using the 'demand-and-supply' model, what is the likely impact of this policy on the equilibrium quantity and price of houses, and how this might affect the UK's affordable housing shortage.
Policy: The government has set up a programme of guarantees to support lending to smaller housebuilders by taking on some of the borrowing risk usually borne by developers in their Projects.
Question 1: Which of the Ps and Ss will Change on the graphic?
Attachment:- graphic.zip
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