A rent ceiling set below the equilibrium rent creates a situation in which the quantity demanded of housing is greater than quantity supplied.
<u>Option: C</u>
<u>Explanation:</u>
Rent limit is the highest price a property owner can demand for rent. Rent ceilings are typically fixed by legislation and limit how high the rent can be in a given area. Although, the amount of affordable housing is also reduced as a consequence of this rule, as tenants are not interested in renting out their properties at a cheap price.
Nevertheless, if the limit is placed underneath the level of equilibrium then a reduction of deadweight is produced. Many issues come in the form of illegal markets, scanning time and charges that aren't leased precisely like key money i.e. high initial cost for new keys.
Answer: The correct answer is "d. there will be no shifts of the curves, but the real interest rate rises.".
Explanation: If there is a shortage of loanable funds, then: there will be no shifts of the curves, but the real interest rate rises.
this causes as the interest rate rises to equilibrium the amount offered of loanable funds increases and the quantity demanded of loanable funds decreases
Answer: The answer is True.
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