Rent Control Applies to About Two-Thirds of the Private Rental

question 44

Multiple Choice

Rent control applies to about two-thirds of the private rental housing in New York City. Economic theory suggests that a below-equilibrium price established by rent control:

• A) creates a surplus of rental housing.
• B) promotes a rapid increase in the future supply of housing.
• C) results in poor service and quality deterioration of many rental units.
• D) leads to a reduction in housing discrimination against minorities.

Evaluate the impact of different tax sizes on market outcomes, government revenue, and deadweight loss.

Understand the Laffer curve and its implications for tax policy and government revenue.

Compare and contrast the effects of taxes on markets with different demand and supply elasticities.

Calculate and compare equilibrium quantities and prices before and after taxation.

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Definitions:

Demand For Investment

The desire or willingness of individuals or businesses to allocate resources towards new capital or projects expecting future returns.

Money Supply Curve

A graphical representation of the relationship between the money supply and the interest rate in an economy.

Excess Supply

A situation where the quantity of a good or service supplied is more than the quantity demanded at the current price.

Interest Rate

The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets over a specific period of time.