When Policymakers Impose Price Controls, They

question 115

Multiple Choice

When policymakers impose price controls, they

• A) are usually following the advice of mainstream economists.
• B) usually improve the efficiency of economic activity.
• C) distort the signals that normally guide the allocation of resources.
• D) demonstrate a willingness to sacrifice equity in order to improve efficiency.

---

Definitions:

Mediation

A method of dispute resolution where a neutral third party assists two conflicting sides to reach a mutually agreed-upon solution.

Strike Decline

The decreasing frequency or likelihood of strikes, where workers collectively refuse to work as a form of protest, often due to changing labor laws, union strategies, or economic conditions.

Labor Market Conditions

The supply and demand dynamics for labor, including factors like unemployment rates, wage levels, and the availability of skilled workers.

Strike Probability

The likelihood of a workforce stopping work as a form of protest or to enforce demands for conditions or terms of employment.