When Prices Are Fixed for a Period of Time,such as with Long-Term

question 46

Multiple Choice

When prices are fixed for a period of time,such as with long-term contracts that fix wages,then

• A)the government needs to intervene to adjust prices.
• B)prices adjust,but not quickly enough to avoid shortages or surpluses.
• C)prices do not adjust to changes in market conditions.
• D)prices adjust instantly.
• E)None of the above.

---

Definitions:

Common Stock

A form of corporate equity ownership, a type of security that signifies ownership in a corporation and represents a claim on part of its profits.

Market Price

The current price at which a good or service can be purchased or sold in a competitive marketplace.

Stock Split

A stock split is a corporate action that increases the number of a company's outstanding shares by issuing more shares to current shareholders, which usually results in a decrease in the individual share price.

Common Stock

A form of corporate equity ownership, a type of security that represents ownership in a corporation, giving holders voting rights.