Which of the Following Was an Effect of the Price

question 5

Multiple Choice

Which of the following was an effect of the price ceiling placed on gasoline in the United States in the 1970s?

• A) The inventory of unsold gas increased, and gas stations incurred losses.
• B) Those who valued gas the most were able to buy gas under the price ceiling.
• C) Gas stations ran out of gas as the quantity of gas demanded exceeded the quantity supplied.
• D) Car owners started buying luxury cars that were less fuel efficient as the price of gas was very low.

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Definitions:

Inflation Rate

The percentage increase in the price level of goods and services in an economy over a period of time, indicating the rate at which purchasing power is eroding.

CPI

Consumer Price Index, a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care, as an indicator of inflation or deflation.

GDP Deflator

A measure of the level of prices of all new, domestically produced, final goods and services in an economy, used to adjust nominal GDP to calculate real GDP.

New Goods

Products that have been recently introduced to the market, offering novel features or technologies.