If a Price Floor Is Not Binding, Then

question 144

Multiple Choice

If a price floor is not binding, then

• A)​the equilibrium price is above the price floor.
• B)​the equilibrium price is below the price floor.
• C)​there will be a surplus in the market.
• D)​Both (a) and (c) are correct.

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Definitions:

Checks and Balances

A system in government where each branch has the power to check or limit the actions of the other branches to prevent any single branch from becoming too powerful.

Constitution

The fundamental set of laws and principles that outlines the governance structure, rights, and duties within a state or organization.

Necessary and Proper Clause

A clause in the U.S. Constitution granting Congress the power to pass all laws required and appropriate for executing its declared powers.

Spending Power

The authority of a government to allocate its resources by making expenditures to achieve economic or social objectives.