If Price Gouging Is Prohibited by the Government So That

question 150

Multiple Choice

If price gouging is prohibited by the government so that sellers cannot suddenly raise prices, then a sudden drop in gasoline supply due to bad weather will most likely result in

• A)an equilibrium in the gasoline market.
• B)a surplus in the gasoline market.
• C)a shortage in the gasoline market.
• D)a sudden increase in the quantity demanded of gaslone.
• E)a sudden decrease in gasoline prices.

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Definitions:

Market Interest Rates

The prevailing rates at which borrowers and lenders conduct transactions in the open market.

Buy A Put Option

The purchase of a financial contract allowing the holder to sell a specific amount of an asset at a set price within a specified timeframe.

Interest Rate Cap

A limit on the maximum interest rate increase that can be charged on a variable-rate loan or mortgage.

Treasury Bonds

Treasury Bonds are long-term government debt securities issued by the U.S. Treasury, with maturity periods typically ranging from 20 to 30 years.