The long term effect is that there will be a surplus in the market. Rental ceiling below the equilibrium price The renters will increase their demand for houses as the prices are less than what they are willing and able to sacrifice. The suppliers, on the other hand, will reduce their supply as the current prices are below what they are comfortable with. The long term effect is that there will be a resultant shortage as the demand will be in excess of the supply. Recommendation The board should continually adjust the rental laws to suit the forces of demand and supply so as to avoid either a shortage or supply.
Also, high levels of inflation raise the opportunity cost of holding money balances, in so doing savings reduces (Miller and Benjamin, 2008). Others too may contrarily save more in order to secure the real value of their saved monies. According to Chopra (1988), how inflation affects household’s savings hinges on how they react to a rise in inflation. Although some models found a significant negative impact (Heer and Suessmuth, 2006; Deaton, 1977). The inflation impact on savings therefore is ambiguous in theory and practice (Heer and Suessmuth, 2006; and Deaton and Paxson,
Investors could receive less than the original investment amount when they sell their units in a REIT. The prices generally reflect investors’ confidence in the economy, the property market and its returns, the REIT management, interest rates, and many other factors. Like other stocks, investors must be able to tolerate such price movements. Income Risk: Dividends may not be paid if a REIT reports an operating loss. For example, tenancy agreements of the underlying properties could be renewed at a lower rental rate than the previous agreement or the occupancy rate could fall.
Less jobs will be available as aggregate demand will decrease. This can also lead to a reduction in investments. Government can increase its spending as a means to increase aggregate demand. The more goods and services purchased, the more likely it is that businesses will make sales and will be forced to increase their production levels. Increase in production leads to increased jobs, more money for people to spend on goods and services.
Hotels with quality service ultimately boost their profits. Because there are so many competitors in the industry, outweighing them means that hotels are required to meet the expectations of the customers in the services provided. How customers perceive hotel attributes is related to the degree which guests find different facilities important to their stay, as defined by Wuest et al. (1996). Cleanliness, price, location, services, facilities, vibes, and reputation and only some of the key attributes recognized as the decisive attributes by
Current ratio which measures amount of current assets to current liabilities in a firm and the formulae for this ratio is Current Assets/Current Liabilities = Current ratio. This is the formulae and it insinuates that the current ratio in the liquidity ratios should be between 1.5 to 2. This is because if the ratio is less than 1.5 then the business may be in a susceptible or vulnerable position and if the ratio is higher than 2 then it can show the business has too much capital in a loss-making form. This ratio can be improved, if the business sells its fixed assets and convert into cash or increase the business long-term rather than short-term debts. On the other hand, it can also improve current ratio by raising more share capital instead of
If the supply of rented accommodation is less, then there is an increase in the price of rented apartments. Therefore, in the long run people find that it is cheaper to buy houses than to live in a rented accommodation. Hence, then they will tend to purchase a house. Thereby, increasing the net demand for houses.” The factors that affect supply are: 1- Price 2- Cost- for example The alternative to buying a house is renting. If the cost of renting to buying rises, we would expect to see a fall in demand.
Thus to procure the same amount of goods, it will now cost the company more. Therefore the cost of their raw materials they purchase to make their finished goods will go up. Therefore it can be said that the impact of inflation on a business can be reflected through the change in its revenue as well as the change in its cost of materials consumed given the change in inflation
The depiction of bubbles development happens in distinctive stages. The over-blasting in the housing business sector, which is because of the liberalization in monetary establishments and the bringing down standard in credit home loan, causes a higher interest for houses. This thus pushes house costs over the inferred financial principal values and makes lodging bubbles. however, does not accuse "insanity" or 'unreasonable abundance' for the boom in the land market.The boom of housing bubbles began when individuals' assumptions about the increment in future house costs no more held. A further weakening in financial exercises means that increment in loan costs and expansion rates and in the money related part which is increment in non-performing credits, higher liquidations in monetary establishments brought about more prominent
Some of the economical factors affecting demand of a product are as follows: Price of the product: The prices of the product have a significant impact on the demand for a product. The price and demand have negative relationship; increase in price will significantly reduce the quantity of products demanded resulting in downward slope of demand curve of a product. If the price of a product is really high the consumer will shift their attention to other substitute products that are cheap and performs the same functions. Price of the substitute products: Price of the related goods or the substitute products have a significant impact on the demand of a product. Related goods generally refer to the complimentary products that can be used with the primary products and the substitute products that can be used in place of the primary products.