A Shortage Results When

question 181

Multiple Choice

A shortage results when:

• A) a price floor is imposed.
• B) a price ceiling is imposed.
• C) there is excess supply without any price controls.
• D) a price floor is imposed but it is not binding.

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Definitions:

Pledged Inventory

Inventory that has been used as collateral for a loan.

Commercial Paper

An unsecured, short-term debt instrument issued by corporations, typically used for the financing of payroll, accounts payable, and inventories.

SEC Registration

The process of filing documents required by the Securities and Exchange Commission for new securities to be sold to the public.

Treasuries

Government debt securities issued by the United States Department of the Treasury to finance government spending as an alternative to taxation.