How Does Rent Control Tend to Cause Persistent Imbalances in the Market

question 148

Multiple Choice

How does rent control tend to cause persistent imbalances in the market for housing?

• A)Quantity demanded exceeds quantity supplied but price cannot rise to remove the shortage.
• B)Quantity demanded exceeds quantity supplied but price cannot fall to remove the surplus.
• C)Quantity supplied exceeds quantity demanded but price cannot rise to remove the shortage.
• D)Quantity supplied exceeds quantity demanded but price cannot fall to remove the surplus.

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Definitions:

Marginal Tax Rate

The percentage of tax applied to an individual or entity's next dollar of income, showing the impact of the last dollar earned on their tax liability.

Taxable Income

The amount of an individual’s or a company's income used to determine how much tax they owe the government in a given tax year.

Cash Flow

This term refers to the net amount of cash and cash-equivalents being transferred into and out of a business.

Assets

Items of value owned by a person or company, encompassing both tangible and intangible items that can be used to produce positive economic value.