If the Government Imposes Binding Rent Control

question 117

Multiple Choice

If the government imposes binding rent control:

• A)rent will be set above the equilibrium price.
• B)it may result in some landlords leaving the business because they cannot cover costs.
• C)it will lead to rental units being higher in quality because landlords are guaranteed a high price.
• D)it will cause a surplus of housing.

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Definitions:

Operating Cycle

The time period that starts with the purchase of raw materials and ends with the collection of receivables generated from sales, measuring how long it takes for a business to turn expenditures into cash from sales.

Inventory Turnover

A ratio indicating how many times a company has sold and replaced inventory over a specific period, showing efficiency in managing stock.

Cash Cycle

The duration between the outlay of cash for the purchase of inventory and the collection of cash from customers, reflecting the efficiency of a company's cash management.

Payables

Financial obligations or amounts owed by a business to its suppliers or creditors for goods and services received.