Answer to Question #33705 in Finance for Lina

Question

With which proposition are two economists chosen at random most likely agree with?

- immigrants receive more in government benefits than they contribute in taxes.
- having a single - income tax rate would improve economic performance
- a ceiling on rent reduces the quantity and quality of housing available

Answer 1

Two economists chosen at random would most likely agree with the third statement: “a ceiling on rent reduces the quantity and quality of housing
available”
Rent control, like all other government-mandated price controls, is a law
placing a maximum price, or a “rent ceiling,” on what landlords may charge
tenants. It means that apartments are not able to reach market price. Ceilings
keep them below market price, causing a shortage. So if rents are established
at less than their equilibrium levels, the quantity demanded will necessarily
exceed the amount supplied, and rent control will lead to a shortage of
dwelling spaces.