From an Efficiency Standpoint, Rent Controls

question 56

Multiple Choice

From an efficiency standpoint, rent controls:

• A) increase efficiency by allowing those households who could not afford high rents before to be able to purchase housing.
• B) increase efficiency by increasing consumer surplus.
• C) decrease efficiency because both buyers and sellers would be better off if the price of rents were allowed to rise.
• D) decrease efficiency because they make it illegal to trade.

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Definitions:

Leverage Ratio

A financial ratio indicating the level of debt used by a business to finance its assets, often used to assess financial risk.

Asset Turnover

A financial ratio that measures the efficiency of a company's use of its assets in generating sales revenue.

Total Debt

Total Debt represents the aggregate amount of both short-term and long-term financial obligations owed by an individual, company, or other entity.

Long Term Debt

Borrowings of a company or government that are due to be repaid over a period longer than one year.