To Be Effective, a Price Floor Must Be

question 269

Multiple Choice

To be effective, a price floor must be

• A)above the equilibrium price.
• B)at the equilibrium price.
• C)below the equilibrium price.
• D)anywhere on the graph.

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Definitions:

Price Shock Theory

A theory suggesting that sudden and unexpected changes in prices (typically upwards) can have significant adverse effects on an economy.

Business Cycle

The economic cycle of expansion and contraction that occurs within an economy.

Telecommunications Industry

A sector that facilitates communication over significant distances via telephone, internet, cable, and broadcasting.

Index Of Leading Indicators

A composite statistic of variables that are considered to predict future economic activity, helping analysts and policymakers gauge the economy's direction.