Question

Investors, when considering office buildings as investments, should be aware that:

Question 13 options:

	1) demand for office space increases as the demand for goods increases.
	2) the demand for office space is derived from the demand for services.
	3) the demand for office space is directly correlated with the level of GNP.
	4) none of the above.

Answer 1

GNP = Gross National product.

GNP includes the aggregate value of goods and services that are produced and purchased by a nation during a given time period.

As the GNP increases, it means the demand for goods and services are increasing. As demand rises, more people would want to sell it.

Inturn increasing demand for office space.

There is a positive correlation between Gross National product and demand for office space.

Answer: 3. demand for office space is directly correlated with the level of GNP.

1&2 are incorrect: As demand for office space is dependent on both goods and services.
Hence 3 is the most appropriate answer.