Price Ceilings Would Create All of the Following Effects EXCEPT

question 240

Multiple Choice

Price ceilings would create all of the following effects EXCEPT:

• A) shortages.
• B) reductions in product quality.
• C) a misallocation of resources.
• D) maximum gains from trade.

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Definitions:

Short-Term Financing

Borrowing options intended for a short period, typically less than a year, to cover immediate needs.

Matching Principle

An accounting concept stating that expenses should be matched with the revenues they help to generate, ensuring accurate financial reporting.

Working Capital

The difference between a company’s current assets and current liabilities, showing its short-term financial health and operational efficiency.

Vendors

Entities that supply goods or services to another, typically for business purposes.