(Answered) : Suppose Economic Adviser Local Government Central America Deal Politically Embarrassing Sh Q30941046

Suppose that you are the economic adviser to a local governmentin Central America that has to deal with a politically embarrassingshortage of affordable housing that was caused by rent controlsthat the government recently imposed. Your first suggestion is toget rid of the rent controls. Explain how and why rent controls(price ceilings) distort markets and what are some of the economiceffects of rent controls.

Since the politicians are unwilling to get rid of the rentcontrols, they offer you a list of suggestions to make housing moreaffordable: 1. Government provided housing 2. Tax deductions torenters 3. Tax breaks to construction companies who provideaffordable