In the Market for a Given Product,when a Price Floor

question 89

Multiple Choice

In the market for a given product,when a price floor is set above the equilibrium price the result will be

• A) more exchanges made in the market.
• B) an increase in the supply of the product.
• C) a decrease in the demand for the product.
• D) a deadweight loss.

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Definitions:

Cash Equivalents

Assets readily convertible to a known cash amount within a short period, typically 90 days.

Financing Activities

Transactions and events that affect long-term liabilities and equity of a company, including issuing debt, obtaining loans, or issuing and selling equity securities.

Interest Expense

The financial charge an organization incurs over time for borrowing funds.

Note Payable

A written promissory note wherein the borrower agrees to pay back the lender on demand or at a predetermined future date, along with interest.