Setting the Price of a Good at a High Level

question 178

True/False

Setting the price of a good at a high level so as to discourage its consumption to accomplish a social objective is a strategy often applied by government.

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Definitions:

Effective-Interest Method

A method used in finance to systematically allocate the interest expense or income over the life of a financial asset or liability.

Interest Period

The span of time over which interest is calculated and charged on loans or investments.

Discount Amortization

The gradual write-off of the discount amount on bonds payable over the life of the bond to accurately reflect interest expense over time.

Straight-Line Method

A method of calculating depreciation of an asset by evenly spreading the cost over its useful life.