The Imposition of Price Ceilings on a Market Often Results

question 36

Multiple Choice

The imposition of price ceilings on a market often results in

• A) an increase in investment in the industry.
• B) a persistent surplus in the market.
• C) an increase in expenditures in the black market.
• D) lower prices being offered on the black market.

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Definitions:

Expected Return

Expected return is the anticipated profit or loss from an investment, factoring in all possible outcomes weighted by their probabilities.

Asset Beta

A constant that measures the sensitivity of an asset’s return to market movements and, therefore, the asset’s nondiversifiable risk.

Market Movements

Market Movements refer to the changes and trends in market prices and volumes over time, influenced by various factors including economic indicators, investor sentiment, and external events.

Discount Rate

The interest rate charged to commercial banks and other financial institutions for loans received from a central bank's discount window.