​Exhibit 4-11 Refer to Exhibit 4-11

question 27

Multiple Choice

​Exhibit 4-11 Refer to Exhibit 4-11.  Suppose that the government imposes a price floor in the market for good ABC at a price of $7.  The result of the price floor would be a ____________ of ______ units of good ABC.

• A)shortage; 110
• B)surplus; 110
• C)shortage; 30
• D)surplus; 30

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Definitions:

Hyperinflations

Extremely high and typically accelerating inflation rates, drastically eroding the real value of the local currency.

Real GDP

The market value of all final goods and services produced within a country in a year, adjusted for inflation.

Physical Units

Measurements or quantities of items not based on value or price but on physical count or volume.

Velocity

The rate at which money circulates in an economy, calculated as the ratio of nominal GDP to the money supply.