Rent Is Automatically Increased

question 33

Multiple Choice

Rent is automatically increased:

• A) if the lessor makes expensive improvements to the property.
• B) when the cost of living increases.
• C) if the lease contains an escalation clause and the facts demonstrate that application of such a clause is appropriate
• D) if the lessor's taxes on the rented property are increased.

---

Definitions:

Income Effect

The change in an individual's or economy's income and how that change will impact the quantity demanded of a good or service.

Substitution Effect

The alteration in purchasing habits stemming from a shift in the relative cost of products, causing individuals to replace one item with another.

Price Change

A variation in the cost of a good or service over time or in response to supply and demand dynamics.

Income

The money received by an individual or entity in exchange for labor, from investments, or from any other source, over a period of time.