Suppose a Price Floor on Alcohol Is Set Above the Equilibrium

question 90

True/False

Suppose a price floor on alcohol is set above the equilibrium price.This will increase the supply of alcohol, leading to an increase in sales of alcohol.

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Interest-Bearing Note

A debt instrument that pays interest to the lender over the term of the loan.

Put Option

A financial contract giving the option holder the right, but not the obligation, to sell a specified amount of an underlying asset at a set price within a specified time.

Fair Value Hedge

A hedge that protects against changes in the fair value of assets, liabilities, or firm commitments through the use of a derivative.

British Pounds

The currency of the United Kingdom, also known as GBP, which is one of the world's major currencies.