The Excess Supply Created When Governments Impose a Price Floor

question 133

Multiple Choice

The excess supply created when governments impose a price floor is:

• A) shrinking as the floor rises.
• B) the difference between the old quantity supplied and new quantity demanded.
• C) the difference between the new quantity supplied and the old quantity demanded.
• D) the difference between the new quantity supplied and the new quantity demanded.

---

Definitions:

Exports

The sale of goods and services produced in one country to residents of other countries.

Domestic Saving

The part of a nation's income that is not spent on consumption or government expenditure, and is instead saved or invested domestically.

Domestic Investment

Investments within a country's borders by both the public and private sectors, contributing to the nation's overall economic growth.

Open Economies

refers to countries or markets that engage in free trade with other countries, allowing goods, services, and capital to move across borders with minimal restrictions.