​Exhibit 4-11 Refer to Exhibit 4-11

question 40

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. How many fewer units would be bought and sold at the price floor compared to the number of units that would be bought and sold in a free market?

• A)20
• B)30
• C)40
• D)60
• E)80

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Definitions:

Reserve Requirement

Regulations set by central banks determining the minimum amount of reserves each bank must hold as a proportion of its deposits.

Protection Against Inflation

Strategies or financial instruments designed to safeguard an individual's or entity's purchasing power from the erosion effects of inflation.

Liquid Assets

Assets that can be quickly and easily converted into cash with little to no loss in value.

Stocks

Shares of ownership in a corporation, representing a claim on the corporation's assets and earnings.