In Order to Be Binding,a Price Floor

question 122

Multiple Choice

In order to be binding,a price floor

• A)must lie above the free-market equilibrium price.
• B)must lie below the free-market equilibrium price.
• C)must coincide with the free-market equilibrium price.
• D)must be high enough for firms to earn a profit.

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Definitions:

Taxes On Saving

Charges imposed by government on the interest earned from savings in financial institutions.

National Saving

The total amount of saving in a country, which includes both private savings and public (government) savings.

Closed Economy

An economic system that does not engage in international trade with outside countries, relying on its own resources.

Accounting Identity

A fundamental equation that must always hold true, often without regard to time or specific instances, in accounting and economics.