Which of the following must occur as a result of ceilings on apartment rents that are set below market clearing rental rates?
A. Property owners respond to the ceilings by increasing maintenance and repairs.
B. There is a decrease in the quantity of apartments that prospective tenants wish to rent.
C. Property owners respond to the ceilings by constructing new apartment buildings.
D. There is a decrease in the quantity of apartments that property owners offer for rent.
Answer: D
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If producers have imperfect information about the general price level and sometimes misinterpret changes in the general price level as changes in relative prices, then
A) the short-run aggregate supply curve is vertical. B) the short-run aggregate supply curve slopes upward. C) the aggregate demand curve is vertical. D) the aggregate demand curve is horizontal.
Which of the following is an argument that the incidence of corporate taxation falls entirely on consumers?
A) Corporations pass their tax burdens on to consumers by charging higher prices equal to the amount of the tax. B) Corporations pass their tax burdens on to consumers because consumers ultimately work for the corporations. C) Corporations always evade taxes so that consumers ultimately bear the tax burdens as taxpayers. D) Most taxes on consumers are collected by corporations through sales taxes.
In most societies, dollar price acts as the main rationing device. If dollar price weren't the main rationing device, would there still be a need for some rationing device to take its place?
A) No, because with dollar price there would be no scarcity, although shortages would still exist. B) Yes, because there is a need for a rationing device as long as scarcity exists. C) Yes, because there is a need for a rationing device as long as the world's population is so large. D) No, because dollar price creates scarcity and without money price scarcity wouldn't exist. E) none of the above
If the Federal Reserve decides to increase the money supply:
a) the federal funds rate will rise. b) the federal funds rate will fall. c) the federal funds rate will be unaffected. d) deflation will occur.