One of the Consequences of a Rent Ceiling Set Below

question 63

Multiple Choice

One of the consequences of a rent ceiling set below the equilibrium rent is

• A) decreased search activity.
• B) increased search activity.
• C) the establishment of landlord unions.
• D) surpluses of apartments.
• E) the elimination of the deadweight loss that would otherwise exist in the housing market.

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Definitions:

Excess Reserves

The amount of reserves that a bank holds beyond the required minimum set by the central bank or regulatory authority.

Liquidity

Money or things that can be quickly and easily converted into money with little or no loss of value.

Profits

The financial gain that is achieved when the amount of revenue generated from business activities exceeds the expenses, costs, and taxes needed to sustain the activity.

Interest Rates

The cost of borrowing money, typically expressed as a percentage of the principle.