The adverse effects of rent controls include
A) keeping rental rates too high in a normal market.
B) excessive construction of new rental housing.
C) reduced incentive to construct new rental housing.
D) increased incentives for people to purchase their own homes.
C
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Refer to Figure 8A.1. Capital deepening occurs as long as
A) total saving exceeds depreciation. B) the level of Y is increasing. C) total saving and depreciation are equal. D) depreciation exceeds total saving.
Automatic stabilizers are so-named because
A) they are automatically undertaken by the Federal Reserve Bank to reduce budget deficits. B) they occur automatically when real GDP changes. C) the policy suggestions of the Council of Economic Advisors are automatically followed. D) the policy suggestions of the Office of Management and Budget are automatically followed.
The government, concerned about the wealth redistribution problem caused by the inequality in debt holding among the rich and poor,
a. created low denomination (low priced) savings bonds b. made special efforts to sell bonds to private citizens c. made special efforts to sell bonds to the Federal Reserve d. prohibited the sale of bonds to foreigners e. created a proportional income tax on income derived from bonds
A moderate rate of inflation is considered helpful if it: a. makes wages in labor markets rigid
b. stabilizes the interest rate. c. decreases the rate of growth in investments. d. makes wages in labor markets flexible.