Business, 16.01.2021 19:00 dargy

A) You are given a set of rules for this question: Should we buy a house or not? The following variables are used
A = Level of inflation
B = interest rate
C = housing prices
D = invest in housing (the potential goal)

The rules:
R1: IF inflation is low,
THEN interest rates are low,
ELSE interest rates are high

R2: IF interest rates are high,
THEN housing prices are high.

R3 IF housing prices are high,
THEN do not buy a house,
ELSE buy a house

i) Run backward chaining with a high inflation rate as given
Thus with the fact: Level of inflation as high
ii) Run forward chaining with a high inflation rate as given
Thus with the fact: Level of inflation as high

(13 marks)

b)
You are given an ES with the following rules:

R1: IF interest rates fall,
THEN bond prices will increase

R2: IF interest rates increase,
THEN bond prices will decline

Answers: 2

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A) You are given a set of rules for this question: Should we buy a house or not? The following vari...

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