Asked by Janninah Miller on May 05, 2024
Verified
One problem with rent controls is that policy makers often ignore its secondary effects.
Rent Controls
Government-imposed limits on the amount landlords can charge for leasing residential properties to ensure affordable housing.
Secondary Effects
The indirect impacts of an economic event, policy, or decision that may occur as a consequence of the primary effect, affecting different sectors or parts of the economy.
- Distinguish the features of economic models, highlighting their prognostic capabilities and the significance of information in the decision-making process.
Verified Answer
MD
Michael DeNunzioMay 08, 2024
Final Answer :
True
Explanation :
Rent controls can lead to a decrease in the quantity and quality of available housing, as well as create black markets and shortages. These secondary effects are often overlooked by policy makers who solely focus on the immediate reduction in rent prices.
Learning Objectives
- Distinguish the features of economic models, highlighting their prognostic capabilities and the significance of information in the decision-making process.