What Problem Does the Government Have That Makes Price Regulation

question 135

Multiple Choice

What problem does the government have that makes price regulation less than an ideal solution?

• A) There is no effective way to enforce price regulation.
• B) The government cannot tell what price a firm is charging.
• C) Regulators frequently will not have the information they need to set prices.
• D) Regulation often will lead to lower costs.

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Definitions:

Savers

Individuals or entities that set aside a portion of their disposable income, rather than using it for consumption expenditures.

Borrowers

Individuals or entities that take out loans from financial institutions or individuals, agreeing to repay them over time, typically with interest.

Speculative Motive

The intention to hold cash for the purpose of taking advantage of future changes in the value of assets, securities, or commodities.

Double Coincidence Of Wants

A situation in barter economies where two parties each have what the other wants and agree to trade directly.