Assuming That the Long- Run Supply of Housing Is Highly

question 5

Multiple Choice

Assuming that the long- run supply of housing is highly elastic, the imposition of binding rent controls will lead to

• A) no significant change in the housing shortage over time.
• B) a reduction in the housing shortage over time.
• C) only a temporary housing shortage.
• D) the price of rental housing to revert back to its free- market equilibrium level.
• E) a worsening of the housing shortage over time.

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Definitions:

Future Income

Prospective earnings or revenue that an individual or entity expects to receive.

Interest Rate

The fee imposed by a creditor on a debtor for the utilization of resources, stated as a proportion of the principal amount.

Net Present Value

A financial metric used to assess the value of an investment by calculating the present value of expected future cash flows minus the initial investment cost.

Current Value

The present monetary or market worth of an asset or investment.