In Order for a Price Ceiling to Be Binding, It

question 38

Multiple Choice

In order for a price ceiling to be binding, it must be set _______ the equilibrium price, and it will likely cause _______.

• A) above; a shortage
• B) below; a shortage
• C) above; excess supply
• D) below; excess supply

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Definitions:

Rate Of Inflation

The annual percentage increase in the general level of prices for goods and services in an economy.

Business Expectations

The anticipations or outlooks of businesses regarding future economic conditions, which can influence their decisions on investment, hiring, and production.

Policy Activists

Individuals or groups advocating for specific changes in public policy to address particular issues.

Non-Interventionists

Advocates for a policy or stance where a government does not become involved in the internal conflicts or affairs of other countries.