Home+Sales+in+U.S.+Probably+Climbed+in+January+to+Highest+Level+Since+2010+by+June+Shin

//**REMEMBER: DO NOT SUMMARIZE THE ARTICLE!!!**//

=TITLE OF EXTRACT:= Home Sales in U.S. Probably Climbed in January to Highest Level Since 2010

=SOURCE:= http://www.bloomberg.com/news/2012-02-19/home-sales-in-u-s-probably-climbed-in-january-to-highest-level-since-2010.html

=DATE EXTRACT WAS WRITTEN:= Feb 20, 2012

=DATE CURRENT EVENT WAS WRITTEN:= Feb 19, 2012

=EXPLANATION OF THE ECONOMIC THEORY RELATED TO THE ARTICLE:=

The economic theory that is related to this article is the general theory of the law of supply and law of demand. American facing the low employment rate after 2008, which impacted the real estate industry. Since the demand of the house buying went down due to job lost, the producers aim to lower the price of the houses to increase the house sale. As a result since the price of the house is lowered, slowly the demand of house is going up.If this situation condition the demand curve will be shifted, thus the supply will be shifted as well, the price of the housing will increase. But in a long-run when the price went up too much the demand will drop. To prevent this the government is both setting a new policies to improve the unemployment condition of the America trying to provide more job and due to increase of house sale government is subsidizing the firms to produce more housing that could eventually solve the current condition of United State. The increase in number of house could be also resulted from the low cost of factors of production from the firm resulting from the government subsidies. On the demand side since there are fewer firing compare to 2008-2010 their could show a income effect, which lead the consumer to buy the house. Another reason that contribute is increase in investment to house building company, in short-term this could result improving of demand since the company is increasing, the consumer's will trust more of their product, but in long-term it could optimally lower the cost of production The increment on home sale rate shows that the current jobless condition and economies are improving.

=VOCABULARY TERMS AND DEFINITIONS:=
 * Market- //A place or situation where buyers and sellers communicate with exchange in mind//
 * Supply- Willingness and ability for producers to produce a good at a given price over a given period of time
 * Demand-Quantity of a commodity that will be bought at a given period of time at a given price - what consumers are willing and able to buy at a price affects the demand for that good
 * Law of Supply-a higher quantity of a good will be supplied at a higher price
 * Law of Demand- states that as a price of good or service rises, the quantity demanded will fall; concurrently, if the price of a good or service falls, the quantity demanded will increase
 * Government policy changes: Changes in direct taxes or income, may affect the money that people have to spend and thus their demand.
 * Government intervention- Government intervene in markets in ways that alter the supply.
 * The cost of factors of production- If the Cost of factors of productions lowers the supply will be increased
 * Income effect- As the price of the product falls, the of the consumer will increase, the people will be more likely to buy the product.
 * Price Mechanism- The interaction of supply and demand determine the price equilibrium.

=DIAGRAMS:=

== = = = = =EVALUATION:=

As the price of housing in United states are going up this shows the sign of American economy is doing better. The government is trying to improve the American unemployment condition by changing the government policies. The unemployment have drive the demand of the housing down, so the price of housing at America was very low. The supply of the housing was decreased, since there were no buyers, but price of housing could not go up since no one will willing to buy the house. As the government had changed their policies the people are soo finding more workplace, people are affording more houses driving the price of the housing to go up shifting the demand curve to right, this resulted the supply to also increase thus higher the price of the houses. The government is also subsidizing the firms to produce more housing to keep up the rate of the sale. But there is a opportunity cost to this action since, the money could be used in other field instead of subsidizing house producing industry to fix the current jobless conditions. And the government rely too much on the housing industry to fix up current economy, new alternative have to come and serve to improve the condition.