Question

The policy that would best prevent the real estate and business cycles is A. rent control....

The policy that would best prevent the real estate and business cycles is

A. rent control.

B. land value taxation and fully market-based interest rates.

C. more government spending.

D. interest rate manipulation by the Fed.

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Answer #1

Answer is B. Land value taxation and market based interest rates.

Taxation on land will prevent the real estate sector and business cycles will be prevented by market based interest rates. Interest rates will adjust ifself according to market conditions. In boom interest rate will go up and in recession times interest rates will go down which will induce more investment that could prevent the economy from depression.

So market based interest rates could prevent business cycles.

#Please rate positively...thank you

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