(Figure: Rent Controls) Look at the Figure Rent Controls

question 15

Essay

(Figure: Rent Controls) Look at the figure Rent Controls.If rent controls are set at Rent1:
A.rental apartments may be of inefficiently low quality.
B.there will be an efficient allocation of rentals.
C.some landlords may break the law by renting below the mandated price.
D.new apartments will be constructed.

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Definitions:

Capital Cost Allowance (CCA)

The Capital Cost Allowance (CCA) is a tax deduction available in Canada that represents a yearly depreciation charge for capital assets used in business activities, allowing businesses to write off the cost of assets over time.

Tax Rate

The percentage at which an individual or corporation is taxed on their income or profit.

Required Return

The minimum profit that investors expect to earn on their investment to compensate for the risk taken.

Initial Cash Flow

Refers to the initial amount of money spent or received at the start of a project or investment.