Question

A conclusion that can be drawn from both graphs by looking at 1983 is that interest rates dropped, which led to more home starts. peaked, while home starts bottomed out. climbed, which led to fewer home starts. bottomed out, while home starts peaked.

Answer 1

A: dropped, which led to more home starts.

Answer 2

Answer: interest rates dropped, which led to more home starts.

In the first graph, we can see a sharp rise in interest rates around the year 1983. At the same time, we can see an increase in home starts in the second graph.

The 1980s saw a huge increase in interests rates, sometimes as high as 17-18%. This made it difficult for families to afford a house (by comparison, interest rates nowadays are around 3-5%). The high interest rates were an attempt to control the problem of inflation.