A Price Floor (Set Above the Equilibrium Price)on Rice Will

question 22

Multiple Choice

A price floor (set above the equilibrium price) on rice will

• A)force otherwise profitable farmers out of business.
• B)result in a shortage of rice.
• C)result in a surplus of rice.
• D)clear the market for rice.

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Definitions:

Compounded Annually

Refers to the process where the interest earned on an investment is added to the principal sum at the end of each year, then interest for the next period is calculated on the new principal.

Rate Of Return

The gain or loss of an investment over a specified period, usually expressed as a percentage of the investment's initial cost.

Invested

The act of allocating resources, usually money, into something to earn a return or achieve a financial goal.

Interest

The cost of borrowing money, typically expressed as a percentage of the principal loan amount that has to be paid to the lender over a specific period.