If a Binding Price Floor Is in Place and If

question 54

Multiple Choice

If a binding price floor is in place and if the demand curve for the product shifts rightward,one consequence would be

• A)an increase in the amount of excess demand.
• B)a decrease in the amount of excess demand.
• C)an increase in the amount of excess supply.
• D)a decrease in the amount of excess supply.
• E)a decrease in the quantity exchanged.

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Definitions:

Interest-Bearing Note

A debt instrument that pays interest to the holder at a fixed or variable rate until it matures.

Borrowing Funds

The act of obtaining money from another party with the promise to return the principal amount along with interest.

Accounts Payable

Accounts payable represents the amounts a company owes to suppliers or creditors for goods or services received that have not yet been paid for.

FICA Taxes

Taxes imposed on both employees and employers to fund Social Security and Medicare, based on a percentage of the employees' wages.