Which of the Following Statements Best Describes the Unintended Consequences

question 81

Multiple Choice

Which of the following statements best describes the unintended consequences of usury ceilings?

• A)Usury ceilings placed above equilibrium increase the quantity supplied of loans and decrease the quantity demanded of loans. This creates a shortage.
• B)Usury ceilings cause the demand for loans to increase. Since supply does not increase, a shortage emerges.
• C)Usury ceilings placed below the equilibrium interest rate cause the quantity demanded of loans to be greater than the quantity supplied. As a result, there is a shortage.
• D)Usury ceilings cause the demand curve to shift rightward and the supply curve to shift leftward. As a result, the market no longer clears and a shortage of loans develops.

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Definitions:

Gross Margin Percentage

A profitability metric that measures how much of each dollar of revenue is left after deducting the costs of goods sold.

Net Profit Margin Percentage

A financial ratio that indicates the percentage of revenue that exceeds the costs associated with making and selling products or providing services.

Book Value per Share

The value of a company calculated by dividing total shareholder equity by the number of outstanding shares.

Price-earnings Ratio

A financial metric used to evaluate the value of a company's shares by dividing the current market price of a stock by its earnings per share.