MICROECONOMICS (LL)-W/ACCESS >CUSTOM<
MICROECONOMICS (LL)-W/ACCESS >CUSTOM<
11th Edition
ISBN: 9781264207718
Author: Colander
Publisher: MCG CUSTOM
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Chapter 5, Problem 9QE
To determine

Impact of rent controls.

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How would an increase in the demand for housing affect the market for construction workers? The demand for construction workers would increase, causing construction workers' wages to rise. The demand for construction workers would increase, causing construction workers' wages to fall. The demand for construction workers would decrease, causing construction workers' wages to rise. The demand for construction workers would decrease, causing construction workers' wages to fall.
A city's state cabinet has agreed on a rent freeze for five years to counter rising housing costs in the city. Only housing built since 2014 and some social housing will be exempt from the freeze. Discuss the effect of this policy on the quality and quantity of housing, on landlords and tenants, and on other markets.
Imagine you are a bank manager. Currently, your bank holds $8 million in deposits at a 4% interest rate. However, you need to increase the total deposits to $10 million. The interest rate elasticity of savings is 40. What interest rate should you offer to depositors to obtain the required amount, all other things being equal?
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