An economy has a 30% housing shortage. The county council builds 30% more houses for low-income families and fixes the rent below the equilibrium for the market.
Which effect will this direct provision by the county council have on the market?
Select ONE answer:
- A greater imbalance in the market in private housing will develop.
- Housing waiting lists for poorer families will be cleared.
- The supply of government housing will fall short of demand.
- The supply of private housing for rent will fall by 30%.
Show your workings to arrive at your answer, and explain and justify your reasons:
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This multiple-choice question is suitable for Economics KS4 and KS5 classes.
The answer is 3
- Not correct
- Not correct
- Correct
- Not correct
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